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The video discusses the importance of understanding legal aspects for coaching businesses. The speaker, a former corporate lawyer, emphasizes that the primary purpose of a contract is to clarify the intent of the parties involved in case of a dispute, serving as guidance for a judge. Contracts are not strictly necessary for legal protection; for instance, routine transactions like buying a baguette don't require a formal contract. The key takeaway is that recognizing the fundamental role of contracts can boost confidence when engaging with clients, as the law can still provide protection without formal agreements.