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In this video, Mitchell Losey discusses the importance of contracts for newly established photography and video businesses. He highlights common scenarios where service providers and clients haven't discussed payment or project details upfront, leading to awkward situations after completing work. Many freelancers experience uncertainty about addressing payment, which creates tension in business relationships. Losey emphasizes the need for clear communication regarding services and fees to avoid discomfort and ensure that both parties understand the transaction, thereby protecting the interests of the service provider. A contract can provide clarity and prevent misunderstandings about expectations and payments.