Collecting Attorney's Fees in Delaware
As a Delaware business attorney, I've filed a lot of debt collection lawsuits over the years to recover money owed to my clients. More often than not, my client is the one who has to pay my attorney's fee even though he wins the case. There's a reasonable explanation for this. Simply stated, my client didn't bother to get the other party to agree up front to reimburse attorney's fees if my client has to sue to recover what's owed.
The reason why it's necessary to have the contract address attorney's fees is because of the general rule in Delaware that the losing party will not be ordered to pay the winning party's attorney's fees unless the payment of these fees is authorized by a Delaware statute or by a contract between the parties.
You're a Delaware business owner. A customer wants to obtain your services or buy your merchandise. You negotiate terms, including price. You tell the customer that one of the terms you want is an agreement that if he doesn't pay your bill and you have to sue him to obtain payment, he will reimburse you for the attorney's fees you incur.
If the customer refuses to agree to pay your attorney's fee, what message is he sending you? Is he already thinking that he may not pay your bill? On the other hand, if he knows he's going to pay you on time, why would he be afraid to agree to pay your attorney's fees? And if does refuse, why would you want to do business with someone who's letting you know there may be a problem with payment?
If you want to make sure your customer has to reimburse you for the attorney's fees you incur if you have to sue the customer for payment, it's best to hire an experienced Delaware attorney to write this language into your agreement. If you don't use written agreements, there are still ways to provide for attorney's fees. For example, if your customer accepts your services after he receives your written proposal or fee schedule that contains attorney's fees language, it can be argued that by accepting your services, your customer agreed to the terms on your documents even though there was no formal agreement and even though nothing was signed.
