Attorney Fees in Contracts
Companies extending credit frequently use contracts requiring a non-paying customer to pay attorney fees in the event of a collection law suit. Upon hiring an attorney, the company expects the customer to pay the collection lawyer’s attorney fee. To get a judgment for the attorney fee, the company’s lawyer must get a judge’s order. Even if the customer defaults in the law suit, the clerk of the court is not permitted to enter a judgment for an attorney fee without the judge’s order. The law forces the judge to review all requests for attorney fees to determine if the fee is reasonable. The judge is supposed to review the time and labor required, the time actually spent, the difficulty of the issues involved, the skill and effectiveness of counsel and the prevailing rate for similar legal work in the community. A provision in a contract for attorney fees therefore presents two problems. Getting the order for an attorney fee can waste months of time and the judge cannot be expected to award the actual attorney fee paid to counsel or required by the contract. There is only one possible solution to this problem. The following provision in a contract signed by the customer enables a 25% attorney fee to be gotten in a judgment in the collection law suit without requiring a court order:
CONTRACT PROVISION: All amounts contracted with you and all charges/invoices issued by you are agreed to have represented a 25% discount in contemplation of timely payment and if payment is defaulted, the 25% discount shall be void and immediately restored to the overall agreed sum due and owing.