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Construction contracts are agreements between two parties, typically involving an exchange of money for services like building a house. While basic contracts can be as simple as a verbal agreement, these are legally binding but difficult to enforce due to the challenge of proving the terms. Therefore, it's crucial to get all agreements in writing to avoid misunderstandings. The speaker shares a personal lesson learned early in their business, where a lack of a written contract resulted in a loss of $3,000, emphasizing the importance of documented agreements for protection and clarity in transactions.
