Can You Recover Attorney’s Fees In An Ohio Breach Of Contract Lawsuit?

If you’re in a contract dispute, you might think that the party that loses the case has to pay the other side’s attorney fees. That, however, is not normally the case in Ohio. Whether you can recover the attorney fees will depend on a number of factors, one of which is the terms of the contract.

Having knowledge of when you can get attorney’s fees may come in handy in making certain decisions.

Ohio follows the “American rule” 

Like many other states, Ohio operates under the so-called American Rule. According to this rule, parties must cover their own lawyers’ costs regardless of the outcome of the case.

Unlike the so-called “English Rule,” where the losing side generally pays the winner’s legal fees, the American Rule does not allow a party to recover their attorney fees even if the breach of contract claim is proven.

Contractual fee-shifting provisions 

One of the most prevalent exceptions to the American Rule concerns the very nature of the contract. Most business contracts contain an attorney fees clause stating that, should one side sue to enforce the contract and prevail, the prevailing party will be awarded attorney fees and the costs of litigation incurred by them in enforcing the contract.

Such clauses are typically contained in:

• Commercial leases
• Construction contracts
• Business purchase contracts
• Contracts between vendors/suppliers
• Loan agreements
• Service agreements

Provided that the attorneys’ fees provision is valid and enforceable, an Ohio court may award attorneys’ fees to the prevailing party against the non-prevailing party.

Other exceptions under Ohio law 

Attorney fees may be recovered under statutory law or in cases where there are known exceptions to that effect. For instance, Ohio consumer laws allow a consumer to recover attorney fees if a business engages in deceptive or fraudulent conduct. Furthermore, there might be other laws that address specific matters that provide for the recovery of attorney fees.

Attorney’s fees may also be awarded in exceptional cases involving bad faith or contempt of court.

What do “reasonable” attorney fees mean? 

Even where the lawyer’s fees are recoverable, the courts do not automatically grant all the money paid out in fees to get legal assistance. Instead, the courts assess whether the fees demanded are reasonable. This can depend on:

• The nature of the case
• Reasonable time used by the lawyers
• Hourly rates within the community
• Results attained
• Experience and ability of the lawyers

Based on this assessment, the court might grant an amount lower than the actual fees paid.

Why contract review matters 

Many companies enter into contracts without careful consideration of the attorney fee provisions contained therein. A well-written clause in this regard will have a significant impact on how the financial effects of future lawsuits manifest.

It would be prudent for a person, before engaging in any significant business contract, to consult with an experienced lawyer to see whether the attorney’s fees provisions are reasonable for your benefit. Also, when a person is in disagreement over a breach of contract, a lawyer can ascertain whether the other party should be liable for the attorney’s fees.

Such considerations can go a long way towards making good decisions.

Talk to a Dayton, OH, General Counsel Business Representation Attorney 

Kohl & Cook Law Firm, LLC, represents the interests of Dayton businesses requiring legal aid. Call our Dayton business lawyers today to schedule an appointment, and we can begin discussing your needs right away.