Carl’s company completes tenant build-outs for leased property. After finishing an office suite for a client, he billed his fee of $20,000 as agreed in the contract. Three months later the fee was still unpaid.
He sued and won a judgment, but he ended up paying $25,000 in legal fees.
He had a contract, but was unable to get the results he wanted, because the contract didn’t include a simple provision giving him the right to recover his costs and expenses if he wins in a contract dispute. If it did, he would have recovered the $20,000 owed plus $25,000 in legal fees.
This clause is invaluable in making a lawsuit cost-effective, and it is a disincentive to filing frivolous lawsuits. It's a great provision to include in most contracts.