Attorney Fees in North Carolina Business Contracts

November 4, 2011

North Carolina has traditionally limited recovery of attorney fees in business contracts to certain limited circumstances, even if the contract allowed for the recovery of attorney fees in the event of a dispute or litigation between the parties.  However, North Carolina has issued a new law which allows for the recovery of reasonable attorney fees at the court’s discretion where those fees are in a written business contract and are reciprocal. This new law should have a significant impact on how business contract disputes are litigated.

This new law applies only to business contracts which are entered into for a business or commercial purpose.  It specifically excludes consumer or retail contracts, employment contacts, and government contracts.  These reciprocal business contracts must be written and signed by hand.  This, presumably, is an attempt to eliminate online agreements where parties click-through their assent to the agreement with an electronic signature.

This new attorney fee provision does not impact the existing attorney fee statutes, some of which allow for recovery in 1) some low-damages personal injury or insurance matter; 2) in cases involving a note, conditional sale contract, or other evidence of indebtedness; 3) cases involving bad checks; or 4) in cases involving protecting lien and bond rights.  Those fee provisions remain in place and are valuable leverage in pursuing civil litigation.

If you have a case that allows for the potential recovery of attorney fees or need some assistance in drafting your business contract in a matter such that your attorney fee provision will be enforceable, contact Maginnis Law, PLLC at 919.526.0450 or submit a confidential new case inquiry here.  Maginnis Law, PLLC is a Raleigh civil litigation firm with business litigation attorney handling matters in Cary, Apex, Durham, Morrisville, Holly Springs, and the rest of the Research Triangle area.  Contact the firm for a free initial consultation regarding your issue.

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