Attorney’s fees play a significant role in pursuing a case. A contractual clause will determine when an attorney’s fee will be awarded. When a legal dispute happens and people go to court, a basic rule is that each party of the lawsuit must pay their own attorneys’ fees. When the two parties (or companies) sign a specific contract, they can require the losing side of the dispute to pay the prevailing (winning) side’s attorney costs.
An attorney’s fee provision can be included in all kinds of contracts -consulting to leases. Attorney costs can be many things such as filing fees, serving summons, court reporters, transcribers, interviews and testimonials. If a jury is part of the equation, a daily stipend must be paid to them. In most cases, court costs are paid by both parties, but if there is an attorney fee clause, the losing party is responsible for both parties’ court costs.
Under a mutual provision, the party who wins the lawsuit is awarded attorney’s fees. This encourages expeditious resolution. Undera one-way provision, only one of the parties receives the attorney’s fees. This is mostly the party with a better bargaining position. One-way provisions naturally create an unfair environment for resolving disputes. For example, in California, this unfairness is recognized as any one-way attorney’s fees are automatically converted to mutual provisions.
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