Why Include a Prevailing Party Attorney’s Fees Provision in Florida Contracts

In Florida contracts, certain provisions may significantly influence the resolution of disputes and the allocation of litigation expenses. One of the most effective clauses is the prevailing party attorney’s fees provision. This provision stipulates that the party who prevails in any action to enforce or defend a contract is entitled to recover its reasonable attorney’s fees from the non-prevailing party.

Understanding the Prevailing Party Attorney’s Fees Provision

Florida law follows a default principle known as the “American Rule.” Under this rule, each party to a lawsuit is responsible for paying its own attorney’s fees, regardless of who ultimately prevails in the case. Contracting parties in Florida may, however, override the American Rule by including a specific provision in their written agreement. Florida Statutes § 57.105(7) addresses this situation and promotes fairness in contractual disputes. The statute provides:

If a contract contains a provision allowing attorney’s fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney’s fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract. This section applies to any contract entered into on or after October 1, 1988.

In practical terms, this means that if a contract includes a one-sided attorneys’ fee clause, allowing only one party (often the stronger party) to recover fees when enforcing the agreement, then the law automatically makes that provision reciprocal. The prevailing party on the other side can also seek recovery of their reasonable attorneys’ fees if they win the litigation related to the contract.

This provision serves several important purposes. It discourages frivolous or overly aggressive litigation by ensuring that the risk of paying the other side’s fees is shared. It also levels the playing field in contractual relationships, particularly in areas such as commercial leases, service agreements, and vendor relationships common in Florida business practice. Importantly, the statute applies only to fee provisions tied to enforcement or interpretation of the contract itself and requires the court to determine both who prevailed and the reasonableness of the fees requested.

If a contract contains a one-sided prevailing party attorney’s fee provision, review it carefully before signing and consider whether a mutual fee provision (or none at all) better aligns with your business objectives and risk tolerance.

Deterring Meritless Claims

One significant advantage of including a prevailing party attorney’s fees provision in a contract is its deterrent effect on meritless or frivolous claims. Without such a clause, a party may feel it’s worth to pursue a weak or unfounded claim, knowing that, even if unsuccessful, they will generally bear only their own legal expenses under the default American Rule. This dynamic can encourage opportunistic or coercive litigation tactics, where the mere threat of costly and time-consuming court proceedings pressures the other party into unwanted settlements or concessions.

By contrast, a prevailing party provision raises the financial stakes for both sides. The party that initiates an unsuccessful action risks not only losing the case but also being ordered to pay the prevailing party’s reasonable attorneys’ fees. This reciprocity, supported by Florida Statutes § 57.105(7), encourages parties to carefully assess the strength of their position before filing suit. It promotes more thoughtful dispute resolution and helps discourage baseless claims that lack legitimate legal or factual support.

Indeed, in Florida business and commercial relationships, such a provision can serve as a valuable risk-management tool. It is particularly useful in contracts involving service agreements, vendor relationships, and other arrangements where there is a potential for disputes. However, it is important to bear in mind that courts retain discretion in awarding fees and will evaluate both whether a party has prevailed and the reasonableness of the amount requested.

Ultimately, a prevailing party attorney’s fees clause can foster greater accountability and efficiency in contractual dealings by aligning the potential costs of litigation more closely with the merits of the underlying claim.

Leveling the Playing Field

Florida commercial contracts often involve parties with unequal bargaining power or financial resources such as a small business or individual contracting with a larger corporation. In the absence of a prevailing party attorney’s fees provision, the less-resourced party may hesitate to enforce legitimate rights, deterred by the potentially substantial cost of litigation. The prospect of bearing its own legal expenses, even upon success, can render valid claims economically impractical to pursue.

A prevailing party provision can help address this imbalance. By allowing the prevailing party, regardless of size or financial strength, to recover reasonable attorney’s fees, the clause reduces the financial barrier to enforcing contractual rights. This promotes greater equity in dispute resolution and encourages parties to pursue meritorious claims rather than abandoning them due to cost concerns.

For smaller Florida entities and individuals, this type of provision can serve as a meaningful safeguard. It helps reduce financial barriers to enforcing legitimate contractual rights and promotes greater balance regarding the economic consequences of litigation. This approach signals that both parties stand on more equal footing when disputes arise. Larger organizations also benefit, as the provision discourages weak claims and promotes efficient resolution of genuine disputes.

Accordingly, when negotiating contracts, parties should consider including reciprocal prevailing party language to foster fairness and predictability.

Closing Remarks

The inclusion of a prevailing party attorney’s fees provision in Florida contracts represents a strategic tool for promoting fairness, discouraging meritless litigation, and helping to level the playing field among parties with varying resources.

By understanding the operation of the American Rule and the reciprocal effect provided under Florida Statutes § 57.105(7), businesses and individuals can make more informed decisions when drafting and negotiating agreements. Such a provision encourages careful evaluation of claims, fosters accountability, and supports more equitable access to contractual remedies. It can also contribute to greater predictability and efficiency in the resolution of disputes arising under the contract.

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If you would like to explore how Venus Caruso can assist with your Florida governed contract, reach out to schedule a complimentary consultation using the contact form or by emailing venus@carusolawoffice.com.

This post provides general information only and is not, and should not be, construed as legal advice or opinion for any individual matter or circumstance. Laws and regulations can change, and specific situations may require different approaches. Always consult a qualified attorney for advice tailored to your specific circumstances.