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Construction contracts are agreements between two parties, usually involving an exchange of something for something else. Typically, it involves exchanging money for a service like building a house. Contracts can be as simple as a verbal agreement, which is legally binding. However, it's essential to get everything in writing to avoid difficulties in proving agreements. Not having a written contract can lead to significant financial losses, as the speaker learned from personal experience, losing about $3,000 due to a lack of written documentation within the first six months of business. Stick to the rule of getting everything in writing to avoid costly mistakes.