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In this video tutorial on freelancing, the speaker explains the difference between contracts and proposals. Contracts are legal documents that detail the terms of the deal, outlining obligations and legal responsibilities. Proposals, on the other hand, serve a sales purpose: they explain why the deal should proceed, including costs and project details. While proposals can also outline terms such as payment, they focus more on selling the deal. The speaker notes that many proposals can effectively function as contracts, highlighting the overlap between the two documents. The content is presented as freelancer advice rather than legal counsel.