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In this video tutorial, the client was sued for $70,000 for using a copyrighted image that his designer had placed on the website during development. The client then sued the designer, causing a legal mess. The video provides tips on how to avoid such nightmare situations, emphasizing the importance of using a solid contract template for web design projects. The speaker clarifies that they are not a legal professional and advises consulting an attorney for legal advice. The contract template shared in the video can be customized to add any necessary legal details for protection.