Describe the way courts classify contracts for unlicensed work

Contract law is generally a matter of state, not federal law. Each state (and federal district, unincorporated territory, and Indian reservation) of the United States has its own body of statute and common law that governs the creation and enforcement of contractual obligations. These laws can vary from one jurisdiction to another, and the statements and analysis offered here are only generalizations. There are, however, broad commonalities between different states’ contract laws, a result of their common descent from English common law. Besides the state statutes and case law, contract law can be found in the Restatement (Second) of the Law of Contracts, a publication of the American Law Institute, which seeks to set forth the “black letter law” of contracts in simple, easy-to-understand terms. While not binding on courts, the Restatement is of great persuasive value in helping courts determine how the law should be applied in specific cases.
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The answer is  passage 1.

There's no picture attached but entrepreneur means a business person.