Attorney's Fees and Construction Contracts
Many of my clients come to me with their claims and assume that the law will afford them their attorney's fees if they prevail in their case. Unfortunately, nothing could be further from the truth. The law does not provide you with attorney's fees unless there is a law that applies to your claim that gives you attorney's fees, or, they are provided for in the contract.
There are a variety of ways of wording attorney's fees provisions in contracts. They can be very one-sided, or more equal. I was just reviewing a contract for a client that allows for the contractor to recover his attorney's fees if he has to pursue payment from the homeowner. This is the contractor's contract, and not surprisingly, it does not afford the homeowner the same benefit. Since in this case, I represent the homeowner, I would be inclined to cross that line out. However, it is unlikely that the contractor would agree to such an exclusion.
The compromise provision would allow the prevailing party to collect attorney's fees. This spreads the risks equally between the contractor and homeowner. In many ways, this is a good clause to include in a contract, because it makes both sides think carefully before filing a claim. It actually promotes settlement because their is greater risk involved and the penalty for losing can be quite high.
One has to think quite carefully before signing a contract that gives either party attorney's fees. I have never seen a contract with a cap on the fees, although courts have been known to reduce them if they think they are unreasonable.
So, before creating a contract, or signing a contract, think about your goal, and think about what is fair. Here in Massachusetts, any violation of the Home Improvement Contractor Statute is a per se violation of the Consumer Protection Statute, which provides for attorney's fees, up to double or triple damages, interest and costs. Given that the law protects homeowners, I try to ensure that contractors have a clause that gives them attorney's fees in their contracts. It equalizes the playing field and makes both sides try to work together to resolve disputes.