When a contract dispute arises and you have to bring a lawsuit against the other party, who’s responsible for the legal fees? Many clients are surprised to find that the general rule in New York is that you’re responsible for your own attorneys’ fees unless there’s a law that applies to the situation, which isn’t terribly common.
As a result, even where the other party clearly violates the contract, you’ll generally be responsible for the cost of pursuing the wrongdoer and any associated fees. This upsets many clients because, honestly, who wants to pay the costs of a lawsuit to recover something to which you’re already entitled?
And what happens when the proceedings drag on and the fees pile up? Isn’t there anything to do?
One way to protect yourself or your company is to include a contract clause that awards reasonable attorneys’ fees to the prevailing party in a dispute. In New York, this sort of language must make it unmistakably clear that the prevailing party is entitled to receive legal fees and expenses. Attorneys familiar with contract litigation can draft this and put you in the best position to protect yourself in case of a dispute. It’s a precautionary measure that can be a great bargaining chip if a dispute arises and ultimately can help to offset the costs of litigation.