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In the video, Matthew demonstrates how to create a release of liability form using legal templates. He advises viewers to go to the business forms section, use the search engine to find the release of liability form, and choose between a general release or car accident waiver. He suggests filling in details such as the releaser's name, address, claims description, payment method, and amount. The governing state for the agreement is typically the same as the releaser's state. A witness or notary may be required.