Should I include an attorney's fees clause?

Usually yes, especially if you're likely to need to enforce the contract. A fees clause deters frivolous disputes and makes small claims worth pursuing.

Can an attorney's fees clause backfire?

If you include a 'prevailing party' clause and you lose, you're paying both your lawyer and theirs. Assess your litigation risk first.

What counts as 'reasonable' attorney's fees?

Courts evaluate based on case complexity, prevailing hourly rate in the area, amount at stake, and results obtained. Judges can reduce excessive requests.

Are attorney's fees clauses enforceable?

Yes, in most jurisdictions. Some states modify one-sided clauses into mutual ones (e.g., California Civil Code Section 1717).

Contract Glossary

Attorney's Fees Clause

Definition

An attorney's fees clause is a contract provision that determines who pays legal costs if a dispute ends up in court or arbitration. Under the default 'American Rule,' each side pays their own lawyers regardless of who wins. An attorney's fees clause changes this.

In Practice

Two businesses sign a service agreement with a prevailing party fees clause. The service provider fails to deliver, and the client sues. The client wins a $25,000 judgment and spent $15,000 on legal fees. Thanks to the clause, the provider now owes $40,000 total.

Example Clause

In the event of any action or proceeding to enforce or interpret this Agreement, the prevailing party shall be entitled to recover its reasonable attorney's fees, expert witness fees, and costs of suit from the non-prevailing party.

Common in these contract types

Service Agreement Freelance Contract Lease Agreement Non-Disclosure Agreement Consulting Agreement Employment Agreement Partnership Agreement

Related contract clauses

Confidentiality Clause Indemnification Clause Force Majeure Clause

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Frequently asked questions about attorney's fees clause

The default in the U.S.: each party pays their own fees, win or lose. An attorney's fees clause overrides this for disputes arising from that agreement.

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This content is for informational purposes only and does not constitute legal advice. For contracts with significant financial or legal implications, review by a qualified attorney is recommended.