Attorney’s Fees Provisions in Commercial Agreements Under Connecticut Law

Under Connecticut law, parties to a commercial contract generally bear their own attorney’s fees absent a statute or contractual provision providing otherwise. Consequently, attorney’s fees provisions are common in commercial agreements and are routinely enforced when they are clearly drafted and reflect the parties’ intent.

Contract  language providing that a prevailing party is entitled to recover reasonable attorney’s fees will generally be upheld. However, courts will not infer a right to fees that is not expressly stated in the agreement. In any contract or lease between a commercial party and a consumer which provides for the commercial party’s attorney’s fee to be paid by the consumer, the consumer is also entitled to attorney’s fees when the consumer successfully prosecutes or defends the action or a counterclaim. This is the case even if the contract only provides for the commercial party’s fees.

The amount of attorney’s fees awarded under a contractual provision must be reasonable. Connecticut courts evaluate reasonableness by considering factors such as the time and labor required, the complexity of the issues involved, customary fees charged in the locality, the experience and skill of counsel, and the results obtained. The court always retains discretion to determine whether the fees sought are reasonable. The party requesting fees typically bears the burden of substantiating its request through billing records, affidavits, or testimony.

Drafting considerations are particularly important in commercial agreements. Parties should specify whether fees are available only to the prevailing party or to any party enforcing the agreement, whether the provision applies to arbitration and appellate proceedings, and whether recoverable costs include expert witness fees and other litigation expenses. Clear language minimizes disputes over the scope of recoverable fees and enhances the likelihood that the provision will be enforced as intended. Without a well drafted attorney’s fees provision, the cost of enforcing a contract may exceed the likely gain. With the increasing cost of commercial litigation, including an attorney’s fees provision in every commercial contract is critical to obtaining a recovery that fairly reflects a party’s actual damages.