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Quote of the Day - If at first you don't succeed, find out if the loser gets anything. - Bill Lyon
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Attorneys Fees Loser Becomes The Winner

Everyone's got their hand out. What am I talking about? Well, what makes the world go around?

When there's an attorneys fees provision in a contract, the parties are justifiably concerned over who will be the prevailing party. You know, winner takes all. Especially when fees get high - in the hundreds of thousands and into the millions.

But let's get back to reality. Here's the setup:

You want to buy some land to build a house. Luckily, the land you want to buy is for sale. You both enter into escrow (aka "contract"). That escrow has an attorneys fees provision in it. Uh oh.

Yep, the dreaded consequence of loser pays. Don't get ahead of me, though.

The buyer and seller got into a dispute, as you expected they would. Then, they looked to the escrow contract and discovered the attorneys fees provision. The winners claimed they were entitled to recover attorneys fees.

The loser wasn't pleased with that outcome (an award of almost $400,000), and appealed. Who won? The loser.

Go figure. The court reasoned that the attorneys fees provision in the escrow contract was designed to deal with disputes that arose out of the performance of the escrow, not disputes between the buyer and seller that revolved around their relationship as buyer and seller.

Does it pay to be the winner?

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Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Thursday, April 07, 2005 at 00:51 Comments Closed (0) |
 
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