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In this tutorial on starting freelancing, the host discusses the concepts of contracts and proposals. They clarify that contracts are legal documents outlining the terms of a deal, including obligations and legal terms. In contrast, proposals serve as sales documents focused on persuading the client to agree to the deal, detailing what is included and the associated costs. While proposals also include some terms similar to contracts, they are primarily aimed at securing the agreement. The host emphasizes the importance of both documents in the freelancing process but notes that the information provided is based on personal experience rather than legal expertise.