An Essential Provision in Every Florida Business Contract: An “Attorney’s Fees” Provision

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An Essential Provision in Every Florida Business Contract: An “Attorney’s Fees” Provision

March 2, 2017

An Essential Provision in Every Florida Business ContractAs a Fort Lauderdale commercial litigation attorney, my Florida business clients frequently request that I review and draft their contracts.  In addition to capturing the parties’ intentions regarding the key aspects of the transaction for which their contract is drafted—and avoiding ambiguities and inconsistent provisions that might fuel a potential business dispute—most business contracts contain certain boilerplate terms that will be “virtually the same” in every contract.  These provisions are included for good reason (they’re important!), even though lawyers may differ as to what they should say. 

By far (and without a doubt), the most important provision in a Florida business contract is a prevailing party “attorney’s fees” provision.  There are different ways in which to draft these provisions, but such a provision will, in substance, say that, in any lawsuit to enforce or interpret the terms of the contract, the prevailing party (the party who wins the lawsuit) is entitled to recover attorney’s fees from the other (losing) party.  I don’t believe this provision is important for (completely) selfish-reasons, but because the inclusion of this provision is, in fact, terribly important: Under the so-called “American rule,” each party bears his or its own attorney’s fees and costs, regardless of who wins the case.  Especially if the amount in dispute is less than $50,000.00, the inclusion of a prevailing party attorney’s fees provision is critical to ensuring that the lawsuit is economically viable: If the amount of attorney’s fees exceeds the amount of the claim, then it makes zero financial sense to assert the claim—unless the other side is paying those fees for you.

To be sure, even if a contract doesn’t contain an attorney’s fees (or “fee-shifting”) provision, a litigant might still be able to recovery attorney’s fees from an opposing party.  For instance, a statute might provide for such an award.  In the context of business law claims asserted under color of state law, attorney’s fees are recoverable under (among other statutes) Florida’s Civil Theft Statute (s. 772.11) and Florida’s Deceptive and Unfair Trade Practices Act (s. 501.201, et seq.).  In the context of federal business litigation, there are numerous ways in which attorney’s fees might be recovered under a statute, usually a section of the United States Code.  However, in contrast to their Florida (state law) counterparts, many of these fee-shifting statutes are one-way, meaning that the plaintiff recovers attorney’s fees if he or she wins, but a defendant who wins a case is not entitled to recover attorney’s fees from a losing plaintiff.  Is that fair?  I don’t think so, but that’s the law, at least in most civil rights actions brought in the business litigation context, such as the ADA.The potential solution: A Florida business contract that provides for an award of prevailing party attorney’s fees.  (Do it.  Tell your friends to do it.  Protect yourself!)

If you are involved in a business dispute in Fort Lauderdale or anywhere else in Florida, please call a Fort Lauderdale business lawyer at (9544400901 to schedule a consultation.  The Carlin Law Firm, PLLC regularly provides legal advice to all kinds of business entities and regularly assist clients with litigating business disputes in Florida state and federal courts.

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