Wednesday, October 26, 2011

Lien Law Online eLert for 10/24/2011 - North Carolina

October 24, 2011

Effective October 1, 2011 reciprocal attorney’s fee provisions are enforceable in all NC commercial contracts. That would include ordinary construction contracts. It would also include ordinary commercial contracts in addition to the narrow category of “written evidence of indebtedness” (i.e., promissory notes) for which attorney’s fee provisions have been statutorily enforceable for years.

There are many differences of opinion about contractual attorney’s fee clauses and whether they are desirable. Legally, however, in NC where enforcement was desired, it was most likely unavailable because NC does not enforce a mere contractual attorney’s fee provision without underlying statutory authority. Arguments that ordinary construction or commercial contracts fell within existing statutory authority usually failed. This new statute, attached, provides that authority.

It remains to be seen whether or not attorney fees that are contractually enforceable can be included in a lien.

Steven D. Hedges, Esquire

Sparrow Wolf & Dennis, P.A.