Legal Term
Fee-Shifting Clause
Legal Definition
A contractual provision that requires one party to pay the other party's legal costs and attorney's fees if a dispute arises and one side 'wins' in court or arbitration. It flips the default American rule where each side pays its own lawyers, regardless of outcome.
In Plain English
It's a 'loser pays' rule baked into your contract. If you sue someone (or they sue you) and you lose, you might have to cover the winner's legal bills on top of your own.
Example in a Contract
> **12. ATTORNEYS' FEES.** If any legal action or proceeding is brought by either party to enforce or interpret this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs, including those incurred on appeal, in addition to any other relief to which such party may be entitled.
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