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In this video tutorial, Mitchell Losey discusses the importance of contracts for photography and video businesses. He highlights the common scenario where a client inquiry leads to a lack of clarity regarding payment and service expectations. As a new business owner, you might find yourself completing a project without having discussed pricing upfront. This can create an awkward situation when it's time to request payment. Losey emphasizes the significance of establishing clear communication about costs and service details before starting a project to avoid discomfort later on. Contracts can help clarify these terms and ensure both parties are on the same page.