attorneys’ fees

Attorneys' Fees!A recent Missouri court case has prompted me to revisit attorneys’ fees provisions in contracts I draft and negotiate. The case, Midland Property Partners, LLC v. Watkins, doesn’t break any new ground, but it reminded me how important the language can be.

Even before reading Midland Property, I’d had attorneys’ fees provisions on my mind. Under the “American Rule,” which is followed by courts in Missouri and most of the rest of the U.S., the parties to breach of contract suits have to pay their own attorneys’ fees — even when they win the case. As a practical matter, this means that it’s often uneconomical for a party to enforce its contract because it’ll still have to foot the bill for its lawyers. I’ve advised a number of clients who’ve had to make the decision to sue or not to sue, and the inability to recover enforcement costs really affects the calculus. [click to continue…]

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Monarch Fire Protection Dist. v. Freedom Consulting & Auditing Services, Inc.

According to the Eighth Circuit’s opinion in this case, under Missouri law a party to a breach of contract action can recover attorneys’ fees for enforcing its rights under the contract via an indemnification clause only if the clause expressly allows for it. But Judge Gruender took issue with that characterization of Missouri contracts law in his dissent. The Missouri Supreme Court might clarify the issue in the future, but in the meantime, the careful drafter would be advised to be crystal clear when the parties intend to maintain the right to recover attorneys’ fees incurred in inter-party litigation. [click to continue…]

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