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In the video tutorial, Matthew explains how to create a plumbing contract using templates from legaltemplates.net. He directs viewers to click on a provided link to access the website. Once there, he instructs them to navigate to "business forms" and use the search function to find "plumbing contract" and "plumbing invoice." After selecting the contract, viewers are guided to input details such as the transaction type (service), their name and information as the service provider, and the customer's details. Additionally, he emphasizes the importance of describing the service rendered and specifying the price per project, ensuring accurate pricing for multiple jobs.