Entering into a business agreement requires careful planning to ensure your legal rights and financial investments are protected. When you hire an attorney to draft a contract, you rely on their knowledge and skill to protect your interests in the event that contract is breached.
When drafting a contract, it is essential to spell out what will happen if either party fails to honor their promises. A common and useful clause in many contracts is a “prevailing party” clause. In the event of a breach, it allows the prevailing party in a lawsuit to collect reasonable attorney’s fees in addition to their damages.
If an attorney drafts an agreement but leaves out this clause, enforcing the contract could become an expensive hurdle.
That is because Florida courts generally cannot award attorney’s fees to the winning party in a lawsuit unless doing so is specifically authorized by a state statute or explicitly written into the contract at issue.
Without the ability to recover your legal fees, your contract may be almost unenforceable beyond a certain point. There might be an alternative mechanism to recover those fees, but the most straightforward way to collect them would be lost. Worse, specialized legal help might now be needed.
How an omitted fee clause could create significant financial loss
Consider a scenario where a Florida business owner hires a lawyer to draft a commercial agreement worth $35,000. The client assumes the lawyer will handle all necessary contractual protections. However, the lawyer fails to include a prevailing-party attorney’s fee provision in the document.
Later, the other party breaches the agreement, owing the full $35,000, and stops communicating. The business owner attempts to collect the debt through litigation, only to learn that pursuing the case in court will cost at least $40,000 in legal expenses.
The business owner faces a frustrating predicament: spend $40,000 in attorney fees to recover $35,000, or walk away from a legitimate debt. In this situation, the omission of a standard legal clause directly undermines the client’s financial interests.
The legal standard for competent contract drafting
Lawyers owe every client a professional duty to handle their legal matters with reasonable skill and care. In Florida, attorneys are governed by professional standards that dictate how they must serve their clients, as laid out in Chapter 4 of the Florida Rules of Professional Conduct:
- Rule 4-1.1 (Competence): Requires an attorney to provide representation using the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the task.
- Rule 4-1.3 (Diligence): Mandates that an attorney act with reasonable diligence and promptness when representing a client’s interests.
When an attorney prepares a formal contract, failing to include routine provisions that protect a client’s ability to enforce that contract may fall short of these professional standards.
Whether omitting an attorney’s fee clause breaches an attorney’s professional duty depends on the specific scope of representation, client instructions, and standard practices in that specific area of law.
To establish a potential legal malpractice claim under Florida law, three key elements must typically be demonstrated:
- The attorney owed a legal duty of care to the client.
- The attorney breached that duty by failing to perform to the generally accepted standard in that area of law.
- The client suffered measurable financial harm as a direct result of that failure.
In other words, to win a legal malpractice case in Florida, you must prove a “case within a case.” You must show not only that your lawyer breached a duty to you but also that the breach directly caused your financial losses.
In this case, for example, it might not be clear that the counterparty would have agreed to the fee-shifting clause during the original contract negotiations. It might also be challenging to prove that the client would have successfully collected the damages if the prevailing party clause had been included.
Get more information
If you entered into a contract drafted by a lawyer and later discovered you could not economically enforce it because a standard attorney’s fee clause was missing, you may have questions about your options.
Our firm handles legal negligence and malpractice matters throughout the state of Florida. Contact us today to discuss your situation and learn how we may be able to help protect your rights.