Business Law Q&A

You got Business Law questions? We got answers!


Q: Can I recover my attorney's fees with a lawsuit?

A: For most lawsuits, the answer to this question is no. In North Carolina, parties generally pay their own attorney's fees, regardless of who wins at trial, unless a state law provides otherwise. The handful of statutory exceptions that permit a party to request an award of attorney's fees are:

• claims arising from personal injury or property damage, where the plaintiff recovers less than $10,000 and there was an unwarranted refusal by the insurance company to pay the claim. (NCGS §6-21.1);
• claims arising under a "note, conditional sale contract or other evidence of indebtedness." (NCGS §6-21.2) This includes promissory notes, lease agreements, etc. But even under this exception, the amount of attorney's fees that can be awarded is capped to 15% of the "outstanding balance" owed; 
• claims arising under the North Carolina Unfair and Deceptive Trade Practices statutes (NCGS §75-1.1, et seq.);
• "frivolous" claims brought by the other party; claims that are "nonjusticiable." (NCGS §6-21.5);
• claims arising from personal property or real property liens under Chapter 44A of the General statutes.

North Carolina has recently added one more exception to the "everyone pays their own attorney" rule, and it applies to business contracts entered into or on or after October 1, 2011.

N.C. Gen. Stat. §6-21.6 now permits a successful party to seek attorney's fees from the losing party if:

1. the contract is a business contract (as opposed to a consumer or employment contract or a contract with a government or governmental agency of the State);
2. the attorneys' fees are reciprocal and applicable to all parties; and
3. all parties sign the business contract by hand.

Q: How can I tell if this is a "business contract"?

A: North Carolina defines a "business contract" as a contract entered into primarily for business or commercial purposes. Contracts that are NOT business contracts include:

• consumer contracts (for personal, family, or household purposes);
• employment contracts (including traditional Employer/employee agreements and Principal/Independent Contractor agreements);
• contracts involving the North Carolina Government or a governmental agency as a party.

Q: What if I signed the contract with an "electronic" signature or a stamp?

A: It is unlikely that electronic signatures, signature stamps or similar methods would satisfy the "signed by hand" requirement of NCGS §6-21.6. This rule is meant to cover contracts that are signed the traditional way: in ink and by the party's own hand.


Q: What if my opponent's legal fees exceed the value of the lawsuit itself?

A: While there is no limit to the amount of attorney's fees and expenses that can be recovered under this rule, the amount of attorney's fees cannot exceed the amount of money actually recovered by the winning party for their underlying claims.