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The client was sued for $70,000 for a copyrighted image found on the website, leading to a messy legal battle with the designer. In this video, the speaker provides a contract template for web design projects to avoid similar nightmare situations. It is important to clarify that the speaker is not a lawyer and is not providing legal advice, so it is recommended to consult with an attorney for specific legal matters. The contract template shared in the video can be customized with additional details to ensure a strong legal foundation for web design projects.