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Construction contracts are agreements between two parties, typically involving a trade of money for services, such as building a house. The simplest form of a contract can be a verbal agreement, which is legally binding; however, it's difficult to prove such agreements if disputes arise. Therefore, it is crucial to keep everything in writing to avoid complications. The speaker shares a personal experience from their first six months in business, where failing to have a written contract resulted in a loss of about $3,000, highlighting that the absence of clear documentation can lead to significant financial repercussions.
