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In this tutorial, the speaker highlights the crucial differences between an invoice and a legal contract for contractors in California. Many contractors mistakenly believe an invoice serves as a contract, but it is merely a receipt of payment that offers no legal protection. An invoice includes the contractor's and client's information and describes the work and payment. In contrast, a legal contract, specifically a home improvement contract, is required for work on existing residential properties. This type of contract is applicable for various trades, including landscaping, electrical, plumbing, and roofing, when performing work on established homes.