Does a Construction Contract Allow the Prevailing Party in a Lawsuit to Collect Attorney Fees?
Although any industry has its share of disputes and litigation, the construction industry has more than most. The reasons for this are varied; however, if you are part of the construction industry the important thing to remember is the need to be prepared for the possibility of a dispute because litigating a dispute can be expensive. One question parties to litigation often have is “Does a construction contract allow the prevailing party in a lawsuit to collect attorney fees and court costs?” While there is no universal answer to that question, it is common for a construction contract to have an “attorneys’ fees” provision.
Even a relatively simple construction project will typically require several different parties to contract with each other to get the job done. An owner enters into an initial contract with a general contractor. The general contractor will contract with sub-contractors and those sub-contractors will contract with material suppliers. The larger the construction project the more contracts will likely be involved in the project. Each one of those contracts has the potential to become a lawsuit if a dispute between the parties to the contract erupts. Unfortunately, disputes in the construction industry are common enough that most construction contracts devote a considerable amount of the contract to provisions addressing how a dispute will be handled.
By definition, a contract is an agreement between to two parties. As long as the details of that agreement are not illegal or unconscionable, the parties to a contract can agree to almost anything they choose. As a result, no two construction contracts are exactly the same; however, there are common provisions used in most construction contracts. One of those provisions is an “attorneys’ fees” provision. Any attorneys’ fees provision requires the losing party in a lawsuit to pay the winning party’s legal fee and costs associated with the litigation.
The purpose behind the inclusion of an attorneys’ fees provision is to discourage frivolous or unfounded lawsuits. By requiring a party to pay legal fees and costs if their lawsuit is unsuccessful you effectively require that party to be relatively certain they have a valid legal complaint before taking legal action.
While it is relatively common to have an attorneys’ fees provision in a construction contract there is no requirement that one be included. If you are concerned about frivolous lawsuits being filed in an upcoming construction project you should insist on an attorneys’ fees provision in any contract into which you enter. If you are already under contract and are considering pursuing litigation because of a dispute you should know whether or not the contract you signed included an attorneys’ fees provision as well. In either case, you should contact an experienced Conshohocken, Pennsylvania construction law attorney as soon as possible to discuss your options. Contact the construction law attorneys at Curley & Rothman, LLC by calling 610-834-8819 today to schedule your free consultation.