Put an Attorney's Fees Provision in Your Contract
Updated: May 17, 2020
If you win a lawsuit, the losing party will not pay your attorney's fees, unless required by statute or contract. Relatively few statutes require the award of attorney's fees. Knowing this, you should make it a practice to include an attorney's fees provision in your contracts, purchase orders, and terms and conditions (whether online or on paper).
The provision should give a court or arbitrator the authority to award reasonable attorney's fees, other expert fees, costs, and expenses to the prevailing party in the event of a dispute. In fairness, I suggest the right to attorney's fees and costs be reciprocal - i.e., it should apply to all parties to the contract, not just the party drafting the contract. Don't use the language in this blogpost to draft your attorney's fees provision, engage an attorney to help.
An attorney's fee provision also is a powerful negotiation tool in the event of a dispute, even if a lawsuit has not yet been filed. Each party in the negotiation must now consider the possibility of having to pay the other party's attorney's fees when assessing its potential liability - it makes the potential recovery larger. It also helps level the economic playing field between the parties. Even if one party to a contract is economically stronger than the other party, the risk of having to pay the other party's attorney's fees can help bring that stronger party to the negotiation table, and eventually a resolution, faster.
Can you tell I love attorney's fees provisions? You should learn to love them, too.