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In this tutorial, Matu explains how to create a nanny contract using legal templates from legaltemplates.net. He advises viewers to click on the business forms section and search for the contract they need, rather than scrolling through all the options. The contract should detail the service being offered, the provider's information, the buyer (customer), and a description of the service being provided. This contract template simplifies the process of outlining the nanny's responsibilities and protecting both parties involved.