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In this tutorial, the presenter explains the difference between an invoice and a legal contract for contractors in California. Many contractors misunderstand these two documents. An invoice includes the contractor's and client's information along with a description of the work and payment details, serving merely as a receipt of payment without any legal protection. In contrast, the presenter showcases a home improvement contract, which is essential for work on existing residential properties. This type of contract is applicable to various trades, including landscaping, electrical, plumbing, and roofing work, ensuring legal protection for both parties involved.