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In this video tutorial by Drew Bowers Auger, the importance of having a consulting agreement is emphasized to prevent disputes regarding billing and engagement. Key elements of the consulting contract include clarifying that the client hires the consultant as an independent contractor, specifying payment amount and frequency, acceptable payment methods, and obtaining signatures from both parties. The video also presents sample consulting agreement templates and advises that contracts are often biased towards the drafting party. It is recommended for consultants to have clients sign their contract; if the consultant must sign the client's contract, it is crucial to carefully review it and ensure clarity on billing rates, frequency, and project completion before agreeing.