Monday, July 28, 2008

TLD's General Counsel Blog : Contract Disputes Are On The Rise

I am big cheerleader for what TLD's General Counsel Blog advocates in Contract Disputes Are On The Rise:

"Contract disputes are on the rise. I always encourage small business owners to include attorney's fee provisions in all contracts to be able to recoup the expenses of collection or enforcement of agreements. The precise language, however, must be carefully considered. In the event the term 'reasonable attorney's fees' is used, then the court fixes the fees, thereby leaving open the possibility that the prevailing party will not recoup all of the amount spent. By contrast, if the term 'actual attorney's fees' is used, then the prevailing party can recover the actual amount spent on attorneys."
This kind of clause I see missing in all kinds of contract drafted by non-lawyers. The non-lawyers think they have save sooooooooooo much by doing it themselves. Then the contract goes bad and any savings vanish.

I have not seen "actual attorney fees" used but I think it is a good idea. I still know some judges who will cut fees under the "reasonable attorney fees" language who will do so probalby under this kind of language.