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Construction contracts are agreements between two parties, typically involving the exchange of money for services, such as building a house. The most fundamental contract can be a verbal agreement, which is legally binding but hard to prove in case of a dispute. It's essential to get everything in writing to avoid misunderstandings. The speaker shares a personal experience from the first six months of their business, where a lack of written contracts led to a loss of about $3,000, emphasizing the importance of documenting agreements to prevent financial setbacks.
