PHASE 2. Damages Assessment

Review any written agreement with your adversary for an Attorney Fee provision. Typically, an Attorney Fee provision provides that if one of the parties brings an action to enforce the contract’s terms, the Attorney Fees of the prevailing party will be reimbursed by the losing party. In some states if the provision is one-sided, it is considered two-sided in the eyes of the law. In those states, if I agree to pay your Attorney Fees if you win, you are automatically bound to pay my Attorney Fees if I win.

Understanding Attorney Fee Provisions

The service agreement between Crafty Chris and Betty contains an Attorney Fee provision. The provision reads as follows:

Client agrees that if computer consultant hires an attorney to enforce this contract, Client will pay computer consultant’s Attorney Fees if computer consultant wins.

As above-stated, in most states this one-sided provision would be interpreted as reciprocal, with Attorney Fees awarded to either winning party. Thus, this provision might just as well read:

The parties agree that if either of them commences legal proceedings to enforce the terms of this contract, the winning party will be entitled to collect reasonable Attorney Fees from the other party.

If there is no written agreement for the payment of Attorney Fees, in most states the parties are not entitled to reimbursement for Attorney Fees paid, no matter who wins. There are a few exceptions to this rule, too few to mention here.

Net Damages calculated at the end of this Phase 2 are affected by your reply to this question. Your Legal Options Assessment in Phase 3 is improved by a contract with an Attorney Fee provision if you do plan to hire an attorney.

 Example: The Case of the Crafty Computer Consultant

As described above, Betty’s contract with Crafty includes a one-sided Attorney Fee provision which should be interpreted as reciprocal in the state for her dispute. So, Betty answers this question Yes.