Attorney's Fees Clause

In one sentence

A contract provision stating that the losing party must pay the winning party's legal costs if a dispute arises.

Plain English

Normally, each party pays its own lawyer's fees, even if one side wins the lawsuit. An attorney's fees clause changes that by requiring the losing party to reimburse the winner's legal expenses. This clause encourages parties to settle disputes fairly because the financial stakes are higher—losing means paying not just damages but also the other side's attorney's fees. These clauses are especially common in commercial contracts, loan agreements, and leases. Courts will enforce them, though they must be clearly written and not unconscionable.

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Example

A commercial lease includes an attorney's fees clause stating that if the landlord must sue to evict a tenant for non-payment, the tenant must pay the landlord's legal fees. When the landlord wins, the tenant owes not only back rent but also $15,000 in attorney's fees.

Used in a sentence

“The contract's attorney's fees clause meant that the defendant had to pay the plaintiff's legal costs after losing the breach of contract case.”

Related terms

Contract

A legally binding agreement between two or more parties to do or not do something.

Remedy

A legal action or payment a court awards to fix a harm or enforce a right after a breach.

Damages Calculation

The process of determining how much money a harmed party should receive for a breach.

Boilerplate

Standard, pre-written contract language used repeatedly in many agreements without customization.

Boilerplate Clause

Standard, repetitive contract language used in many agreements without customization.

Ad Damnum Clause

A contract section stating the maximum amount of damages one party can claim.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.