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In this video tutorial on Zoho Contracts, Arjun explains how to create a new contract type and build a contract template. He emphasizes that configuring contract types is a key initial setup step. To begin, users should access the contract types list via the admin tab and select contract types. Zoho provides 14 built-in contract types with predefined templates. To create a new type, click "new contract type," define essential attributes like category and intent, specify who initiates the contract, and choose the approval workflow. After filling out the necessary details, clicking "save and continue" redirects users to the edit template page.