How Do We Fight and Who Pays For It?

Last week, we covered the ever-exciting topic of Force Majeure.  All joking aside, this and the other boilerplate provisions can be very impactful on your ability to enforce or defend your rights under an agreement.  Today, we are reviewing attorney’s fees and jury trial waiver clauses.  So, let’s jump right in.    

Attorney’s Fees & Court Costs

In general, the prevailing party in a contractual dispute cannot recover attorney’s fees and/or court costs unless it has been codified in a statute or the two parties agree to it.  The first is self-explanatory, but the second is not always so clear.  An attorney’s fees clause basically says that a losing party will reimburse the winning party for its actual or reasonable attorney’s fees, court costs, and other litigation-related costs and expenses.  Inclusion of this provision can be a useful tool to get the parties to settle a contractual dispute versus using the court system.   

Jury Trial Waiver

Many times an agreement will include a jury trial waiver provision if one or both of the parties prefer a judge to handle any dispute resolution versus using a jury.  Now, why would they do that?  Below are some of the reasons: 

• A judge may have a higher level of understanding of a particularly complex issue in a contractual dispute.   
• A judge’s ruling may lead to a more predictable outcome and less prone to being overturned on appeal. 
• A jury may have an implicit bias against one or both parties (e.g., favoring small businesses over large national corporations). 
• A jury trial is likely to be more costly. 

 
Another thing to note is that when you see a jury trial waiver clause, you will want to pay attention to the choice of law and forum clauses as well.  These provisions will typically be carefully considered by the party drafting the agreement to be more beneficial to their interests. 
 
If you have a concern or question about these provisions, make sure you talk with your professional business advisors.  If you are going to have to defend your contractual rights, you want to know the rules of the game. 
  
As many of you may have seen, last week, the FTC issued its decision banning non-competes.  We will cover this topic more in depth in next week’s MPL General Counsel Corner. 
 
A few things that may be of interest: 

• May Update from August Wealth Advisors – Thanks to Howie Greenberg for sharing.
• Blog | Utilizing Technology Strategically to Propel Your Business Forward (stambaughness.com)
• Lenders that Pay Lip Service to Non-Sponsored Deals (youtube.com)  (attractcapital.com)
• Illuminating Mezzanine Debt Covenant Breakage (attractcapital.com)

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com), Brad Leber (bleber@mpl-law.com) or anyone in our office with questions or comments.   

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.