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In the video, the speaker discusses the importance of two key documents for freelancers: proposals and contracts. They recount a personal experience of being unsure about what a proposal was when first asked. A proposal is defined as a formal document that outlines the services offered to the client and the associated costs. It usually reflects details previously discussed during a phone call and serves to ensure both the freelancer and client agree on the services and investment. The speaker emphasizes that clarity in these documents is crucial for a successful working relationship. They also mention having a separate video focused on contracts.