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The video discusses behavioral contracts, which are typically written agreements consisting of two main parts: a task and a reward. An effective contract should be specific about the "who," "what," "when," and "how well." For example, a scenario is presented where a 10-year-old named Jeff is tasked with cleaning his bedroom, which includes specific instructions like putting away clothes and cleaning his desk. The contract specifies that he must complete these tasks at least five nights a week, with the allowance of missing one day. In return for completing the tasks, Jeff earns quality time with his dad on Saturdays, where he can choose from various activities.