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In this video tutorial, the speaker discusses the differences between contracts and proposals in freelancing. They clarify that contracts are legal documents detailing the terms of a deal, including who owes what and other legal obligations. In contrast, proposals serve as sales documents aimed at persuading clients to engage in the deal, outlining what the project entails and its costs. While proposals often include payment terms and project specifics, they focus more on selling the service. Many proposals can effectively function as contracts, incorporating essential elements of both types of documents. The speaker emphasizes their advice is from a freelancer's perspective, not legal.