In today’s Freedom Friday blog and email newsletter, I want to talk about a topic that comes up with some of my clients, and that’s if they win their case, can they get the other side to pay their attorney’s fees. Most of the time, the answer is no, but sometimes you can get an attorney’s fee award, in some cases, especially if the contract allows for attorney’s fees for the prevailing party (the party that prevails in the lawsuit). So, in today’s Freedom Friday blog, we’re talking about why your small business contracts need an attorney fees clause.
In Oklahoma, courts usually follow what’s called the American Rule. The American Rule states that each side in a lawsuit pays their own fees, unless the contract allows for attorney fees to the prevailing party, or there is a statute that applies and would award attorney fees to the prevailing party. In Oklahoma, there are several statutory exceptions, including actions on open accounts (invoices), promissory notes, contracts relating to a sale of goods, and negligent or intentional property damage. Otherwise, in the business litigation context, the contract itself must have a clause that allows for attorney fees to be awarded to a prevailing party.
If your small business contract has an attorney fees clause, these are also known as fee-shifting clauses. These clauses deter breaches, give you leverage to negotiate if there is a breach of contract dispute, and make enforcement of the contract more viable because a smaller claim can result in a larger award of attorney fees. Otherwise, the costs of litigation might exceed the amount of damages, and the attorney fees drive the settlement process, especially if the parties in a lawsuit want to stop the financial bleeding. This is why your small business contracts should include a prevailing party attorney fees clause.
Thinking about starting a small business? Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth? Please contact me at Jonathan@libertylegalok.com to schedule a FREE strategy session.
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