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Friday, November 22, 2013
As the old adage goes, an ounce of prevention is worth a pound of cure. There is no other place that this rings more true than in the formation of a business relationship. Taking a moment or two to outline the details is an important step and can prevent a long and drawn-out legal battle in the future. While it is nearly impossible to anticipate every potential problem, problems nonetheless should be expected to arise, and problems usually involve having to hire an attorney.   Addressing who should have to pay for attorney fees, and under what circumstances is worthy of consideration when forming a business relationship.   
In Idaho, the general rule is that each party to a lawsuit has to bear their own attorney fees.  Idaho law recognizes two exceptions to the general rule: (1) if a statute involved in the lawsuit provides for attorney fees; or (2) if the parties’ agreement at issue in the lawsuit provides for attorney fees.  Attorney fees by statute are limited to certain circumstances. Attorney fees by a provision in a contract can provide for attorney fees on your terms.   Even if the parties agree to arbitration, without a provision in the parties’ agreement providing for attorney fees in arbitration, not even a successful party to the arbitration will be able to get their attorney fees reimbursed.
While thinking about and planning for destruction at the time that you are trying to create something seems counter intuitive, if you put in a little effort into preventing a problem, you will not have to put in a lot of effort into solving the problem should it arise later. Attorney fees are a problem that can, and should be addressed in every agreement.    
Posted by eswartz at 11/22/2013 5:40:00 PM
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