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In this video tutorial, Machu explains how to create a terms of use agreement using legal templates. He guides viewers to click on a provided link to access business forms and suggests using the search function for the terms of use agreement. Choosing Texas as the state, he emphasizes the importance of filling out essential company information, including name, email, phone number, and address. He mentions the necessity of including a privacy policy URL and encourages viewers to add one if not already present. Additionally, he covers basic information required, such as website name and social media details, while discussing user-related aspects like age and product/service sales.