| Unlike most of the world, in the United States parties in | | | | transaction go well, anything can happen. It is also |
| litigation pay their own attorney fees unless there is a | | | | easier to come to an agreement with contract terms |
| contract provision or statute that states otherwise. It is | | | | when the parties are getting along. |
| called "The American Rule." When developing your | | | | Prevailing party attorney fees provisions are the most |
| action plan to resolve a dispute, you must keep cost in | | | | common type of attorney fees clause included in |
| mind. | | | | contracts, however, that clause is not the only option |
| Attorney fees can add up quickly in litigation. Unless | | | | available to you. If you are presented with a contract |
| you have a contract that provides for fees or a | | | | that has a prevailing party attorney fee provision |
| statute to rely on, you are stuck paying your attorney | | | | clause, make sure it is reciprocal. Another option is to |
| out of your own pocket. | | | | have the contract provide alternative dispute |
| There are several statutes that include an attorney | | | | resolutions as a mandatory first step prior to litigation, |
| fee provisions, however, the average business person | | | | such as mediation or arbitration. With alternative |
| has no control over statutory language. | | | | dispute resolutions, the contract can require that both |
| You have more control and choices within the | | | | parties share the cost of the neutral in mediation and |
| contracts you entered into because parties are free to | | | | the panel in arbitration. |
| include fees provisions in contracts. Remember to think | | | | Even in your most basic service or product for a fee |
| about potential future conflicts while drafting basic | | | | contract, you can include a fees clause for |
| contracts for your business. Very often attorney fees | | | | non-payment or for having to incur attorney fees to |
| provisions are left out of contracts because at the | | | | collect the amount owed. |
| time of drafting the parties are in agreement and only | | | | Every business person has to be aware of the |
| thinking about the business transaction going well. | | | | bottom line. The cost of litigation is a cost of doing |
| It is worth spending the extra time and effort | | | | business. Knowledge is power. Knowing what the cost |
| protecting yourself at the start of a contractual | | | | or potential cost will be helps in the decision making |
| relationship. While it is everyone's intent that the | | | | process in how to handle any dispute. |