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In the video, the speaker discusses drafting contracts of employment for small business owners frequently facing conflicts. They emphasize the importance of starting with a clear template that includes the employer's letterhead with name and address. The contract should be addressed to the employee, issued in duplicate for signatures, ensuring both parties retain a signed copy. The speaker highlights key considerations and common pitfalls to watch out for when creating the contract. Additionally, the contract is designed to comply with the Terms of Employment Information Act of 1994, outlining the obligations of both the employer and employee.