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In this tutorial, Edgar from TaxDome explains how to create contract templates. First, access the settings page, then navigate to the templates tab and select the contracts sub-tab. You can either create a new contract template or copy existing ones from the template library. If you have existing templates, you can edit them by clicking their names. To start a new template, click the "create template" button. You'll first enter a name for the template and choose between two formatting options: "what you see is what you get," which provides basic formatting tools, or HTML mode, which allows for more detailed formatting through HTML code.