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Legal costs clause: Copy, customize, and use instantly

Introduction

A legal costs clause defines how the parties to the agreement will handle the costs associated with legal proceedings, including attorney fees, court costs, and any other legal expenses. This clause ensures clarity on who will bear the financial responsibility for legal matters that arise during the term of the agreement. It may also outline specific situations in which one party will reimburse the other for legal costs incurred due to breaches, disputes, or third-party claims.

Below are templates for legal costs clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.

This version includes general legal cost provisions.

Each party shall bear its own legal costs and expenses in relation to the negotiation, execution, and performance of this agreement, unless otherwise specified. However, if a party is found to be in breach of this agreement or if a legal dispute arises due to the actions or omissions of one party, that party shall bear the legal costs incurred by the other party in enforcing the terms of this agreement.

This version applies to indemnification.

[Party B] agrees to indemnify and hold [Party A] harmless from any legal costs, including attorney fees and court expenses, incurred as a result of any legal proceedings arising from [Party B]'s breach of this agreement or actions causing harm to [Party A]. [Party B] will cover the legal costs of defending claims brought against [Party A] due to [Party B]'s actions.

This version applies to recovering legal costs.

In the event that a dispute arises under this agreement and one party is required to initiate legal action to enforce its rights, the prevailing party in such action shall be entitled to recover from the losing party all reasonable legal costs, including attorney fees, court fees, and other related expenses.

This version applies to breaches.

If [Party B] breaches any of the terms of this agreement, [Party B] shall be responsible for all legal costs and expenses incurred by [Party A] in connection with enforcing this agreement or defending any claims arising from the breach. This includes attorney fees, court costs, and any other legal costs directly related to the breach.

This version applies to mutual breaches.

In the event of a mutual breach of this agreement by both parties, each party shall bear its own legal costs incurred in connection with the breach. However, if a third-party claims arise as a result of the mutual breach, the parties will share the legal costs associated with defending such claims equally.

This version applies to third-party claims.

[Party B] agrees to cover all legal costs incurred by [Party A] in defending third-party claims arising from [Party B]'s breach of this agreement. This includes any attorney fees, court fees, and other expenses directly related to such claims.

This version applies to splitting costs in disputes.

In the event of a dispute under this agreement, both parties agree to equally split the costs of legal proceedings, including attorney fees, court fees, and arbitration costs. This provision applies unless the dispute arises due to one party's gross negligence or willful misconduct.

This version applies to advance payment.

Each party agrees to advance payment for its own legal costs as incurred during the course of legal proceedings. In the event of a judgment in favor of the prevailing party, the losing party will reimburse the prevailing party for any legal costs that were paid in advance.

This version applies to fault-based cost allocation.

If a legal proceeding arises from the breach of this agreement, the costs of the legal proceedings will be allocated based on the degree of fault of each party. The party at fault will be responsible for paying the legal costs incurred by the other party as a result of the breach.

This version applies to excluding legal expenses.

[Party A] and [Party B] agree that certain legal expenses, such as costs arising from frivolous or unjustified claims, will not be reimbursed under this agreement. Any legal costs related to such claims shall be borne by the party initiating the claims.

This version applies to reimbursement after settlement.

In the event that a settlement is reached in a legal dispute, the party responsible for the breach or the initiating party shall reimburse the other party for all legal costs incurred during the dispute, including any costs associated with the settlement negotiation and related legal services.

This version applies to dispute resolution costs.

In the event of a dispute, both parties agree to share the costs of dispute resolution, including mediation or arbitration fees, equally. However, if a party is found to be at fault for the dispute, that party will be responsible for covering the legal costs incurred by the other party during the dispute resolution process.

This version applies to wrongful termination.

If this agreement is terminated by either party in violation of the terms outlined herein, the terminating party will be responsible for all legal costs, including attorney fees, incurred by the non-terminating party to challenge or defend the wrongful termination.

This version applies to the limitation on reimbursement.

The reimbursement for legal costs shall be limited to reasonable attorney fees and court costs only. Any costs deemed excessive, unnecessary, or unrelated to the specific legal dispute will not be reimbursed under this clause.

This version applies to third-party legal fees.

If a third-party action arises due to either party's breach of this agreement, the responsible party shall reimburse the other for all legal costs incurred to defend against third-party claims. This includes legal fees for settlement negotiations, court proceedings, and any fines or penalties imposed by third parties.

This version applies to multi-jurisdictional costs.

In the event that a legal dispute involves multiple jurisdictions, the parties agree that each will be responsible for their respective legal costs in each jurisdiction. Any costs incurred by [Party A] or [Party B] in defending claims or fulfilling obligations under multiple legal systems will be handled independently by each party.

This version applies to successful claims.

[Party B] agrees to pay all legal costs incurred by [Party A] in connection with enforcing this agreement, including attorney fees and court costs, if [Party A] prevails in a claim or legal action arising from [Party B]'s breach of this agreement.

This version applies to withholding costs for non-payment.

If either party fails to make timely payment for any legal costs incurred under this agreement, the other party has the right to withhold further performance under the agreement until such time as the unpaid legal costs are settled.

This version applies to complex litigation.

In the event of complex or prolonged litigation, [Party A] and [Party B] agree that legal costs may increase. The parties agree to a flexible reimbursement rate for legal expenses, based on the complexity of the case and the duration of the proceedings, as mutually agreed upon.

This version applies to reimbursement after breach.

If either party breaches this agreement, the breaching party will be responsible for reimbursing the non-breaching party for all legal costs incurred in connection with addressing or resolving the breach, including legal fees, arbitration costs, and settlement fees.

This version applies to legal defense.

[Party A] agrees to provide legal defense for [Party B] in the event of a third-party lawsuit that arises as a direct result of [Party B]'s actions under this agreement. [Party B] will reimburse [Party A] for all legal costs, including attorney fees and court costs, should [Party B] be found liable.

This version applies to payment schedule for legal expenses.

The parties agree that legal costs incurred under this agreement will be paid according to the following schedule: [specified payment terms]. Failure to comply with this payment schedule will result in a default and may trigger additional penalties as outlined in this agreement.

This version applies to enforcement actions.

If legal action is required to enforce the terms of this agreement, the party requesting enforcement will be entitled to recover all associated legal costs, including attorney fees, court costs, and any other reasonable expenses incurred in the enforcement process.

This version applies to arbitration costs.

In the event of arbitration, the party prevailing in the arbitration shall be entitled to reimbursement of all legal costs, including attorney fees, administrative fees, and any other costs directly related to the arbitration proceedings. The reimbursement amount will be determined by the arbitrator based on the merits of the case.

This version applies to fraud cases.

If a legal dispute arises due to fraudulent actions or misrepresentations by either party, the responsible party will be liable for all legal costs, including attorney fees, court costs, and any related expenses incurred by the other party in addressing the fraudulent actions.

This version applies to arbitration cost allocation.

In the event that a dispute is resolved through arbitration, the costs of the arbitration, including fees for the arbitrator and any administrative expenses, will be shared equally between the parties unless the arbitrator determines that one party is responsible for the entirety of the costs.

This version applies to tax implications.

[Party A] and [Party B] acknowledge that any legal costs reimbursed under this agreement may have tax implications. Both parties agree to consult with tax advisors to understand the tax consequences of such reimbursements and will make any necessary adjustments to the financial arrangements accordingly.

This version applies to mediation fees.

If mediation is used to resolve any dispute under this agreement, both parties agree to split the mediation fees equally. In the event that one party is found to be at fault, that party will be responsible for covering all mediation costs incurred by both parties.

This version applies to defense costs.

[Party B] agrees to indemnify [Party A] for all legal defense costs incurred by [Party A] in connection with defending claims brought by third parties arising from [Party B]'s actions under this agreement. This includes attorney fees, expert witness fees, and court costs.

This version applies to limiting reimbursement.

In no event will the legal costs reimbursed by [Party A] exceed the amount paid by [Party B] for legal services related to the matter in question, except in the case where additional costs are directly caused by the other party’s actions or inaction.

This version applies to reimbursement after settlement.

If a dispute is settled before litigation proceeds to trial, the prevailing party will be entitled to recover all reasonable legal costs incurred up to the point of settlement, including attorney fees and any pre-settlement settlement negotiations.

This version applies to compliance-related fees.

If legal costs arise due to a party’s failure to comply with regulatory or contractual obligations, that party will be responsible for all legal fees incurred by the other party in addressing the compliance failure, including defense costs and fines.

This version applies to settlement-related costs.

[Party A] will be entitled to recover any legal costs, including attorney fees, incurred in the process of negotiating or entering into a settlement to resolve any dispute arising under this agreement. These costs will be recovered from the other party if that party is determined to be at fault.

This version applies to reasonable attorney fees.

Both parties agree that legal costs, including attorney fees, should be reasonable and proportional to the scope and complexity of the dispute. In cases of legal action, the prevailing party is entitled to recover reasonable attorney fees incurred during the process.

This version applies to emergency injunctions.

In the event that emergency injunctive relief is sought due to a breach of this agreement, the party seeking the injunction shall be entitled to recover any legal costs incurred, including attorney fees and court costs, from the other party, provided that the injunction is granted.

This version applies to pre-litigation settlement.

Before initiating legal proceedings, the parties agree to attempt to resolve any disputes through settlement discussions. Any legal costs incurred during these discussions, including mediation or negotiation costs, will be shared equally unless the settlement discussions result in one party's default or refusal to participate.

This version applies to limiting liability for legal costs.

[Party B] will not be liable for any legal costs incurred by [Party A] in connection with disputes arising from [Party A]'s own failure to comply with the terms of this agreement. [Party B]'s liability for legal costs will be limited to those arising from [Party B]'s own breaches of the agreement.

This version applies to contract dispute reimbursement.

If a dispute arises under this agreement, the prevailing party in the dispute will be entitled to reimbursement of all legal costs, including attorney fees, court fees, and any other expenses directly related to resolving the contract dispute.

This version applies to voluntary settlement.

If the parties agree to a voluntary settlement to resolve any dispute arising under this agreement, they will waive their right to claim reimbursement for legal costs incurred. Each party will bear its own costs in the settlement process.

This version applies to confidentiality breaches.

In the event of a breach of confidentiality under this agreement, the breaching party will be responsible for all legal costs, including attorney fees and court expenses, incurred by the non-breaching party in addressing or remedying the breach.

This version applies to partial victory.

If a party partially prevails in a legal action or dispute, the costs will be allocated proportionally between the parties. The prevailing party will recover a portion of its legal costs, as determined by the court, while the losing party will cover its own costs.

This version applies to amicable settlement.

If the parties resolve a dispute amicably before formal litigation begins, they will share the legal costs incurred during the settlement discussions equally. However, any costs incurred after the amicable settlement will be the responsibility of the party at fault.

This version applies to delays in compliance.

If either party delays compliance with the terms of this agreement and this delay results in legal action, the party responsible for the delay will bear the full legal costs incurred by the other party in seeking to enforce compliance.

This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

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