Saturday, April 18, 2009

Contract Clauses Every General Contractor Should Have-Attorneys' Fees

Many clients are surprised when they find out that they cannot collect their attorney's fees if they have to bring an action to collect payment from a client. In fact, they may end up spending more to collect than the actual dollars owed. Obviously, this is not good business. If your clients owe you money, and they have to pay to try to collect, they should get their legal fees back.

There are various ways to write an attorney's fees clause into a contract. You can state that the prevailing party will collect in the event of a dispute, but that subjects the construction company to potential liability for the other party's fees. Why do that?

Here is an actual clause that I put in one of my client's contracts:

If ABC is required to proceed with any action against the Owner for the breach of any provision of this Agreement, then the Owner agrees to pay all of ABC's reasonable attorneys fees, together with interest and costs.

Put a clause like this in your contract NOW!