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Construction contracts are agreements between two parties, typically involving the exchange of money for services like building a house. While verbal agreements are legally binding, they are difficult to prove in case of disputes, making it essential to get everything in writing. A crucial lesson learned early in business was the importance of formal contracts; one owner lost approximately $3,000 due to lack of written documentation, illustrating the financial risks of verbal agreements. The key takeaway is to always ensure contracts are recorded in writing to protect against potential losses.