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The client was sued for $70,000 for a copyrighted image placed on their website by their designer. The client then sued the designer, leading to a messy situation. In this video, the speaker provides tips to avoid similar legal issues, emphasizing the importance of having a solid contract. The speaker shares their own web design contract template, which can be customized to fit individual needs and legalities. It is recommended to consult with an attorney for legal advice.