Contractual Legal Fees

A fairly standard provision in the alarm contract is a provision for legal fees. I have such a provision in the standard contracts I provide. Alarm Contracts There are a few things you should know about the attorney fee clause. Keep in mind that you can draft any provision you want; it's your contract. Of course your subscriber has to agree to sign the contract with that provision in it. That's the first obstacle, and perhaps the easiest.

There are several common alternative provisions. Here are a sampling:

2. Subscriber shall pay Alarm Company one-third of any amount sued for as and for attorney fees.....

Absent an attorney fee provision the general rule (called the American Rule) is that there is no recovery of legal fees for a breach of contract action.

There may be statutes, particularly consumer protection statutes, that will provide for the consumer to recover legal fees if the contract only provides for the contractor to recover legal fees, and the consumer prevails.

Judge's typically will not be required to enforce the terms of the contract regarding legal fees, and generally will permit only fees that the Judge thinks are reasonable under the circumstances. What considerations are given effect to determine what is reasonable under the circumstances are beyond this article, but the standards do exist and have been fairly well articulated by the courts.

You should have a legal fee recovery clause in your contract, and you can make it one sided. You should include that item in your suit against a subscriber, but keep in mind that you may not be able to recover the full amount if you go to trial, and you may subject yourself to paying legal fees to your subscriber if you lose.