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A photo booth contract is a legal document that regulates the rental of portable photo booths, which capture images quickly, producing polaroid-style photos. These booths are popular for various events, including weddings and corporate gatherings, retaining appeal despite the rise of cell phone cameras. It is essential for operators of photo booth rental companies to utilize contracts for every rental to ensure clarity and protection for both parties. The tutorial emphasizes the importance of having a contract in place and indicates that viewers will receive a link to a customizable photo booth template at the end of the video.