What is the legal test for the right to contract for attorneys' fees in the event of litigation?

California, United States of America


The following excerpt is from Honey Baked Hams, Inc. v. Dickens, 37 Cal.App.4th 421, 43 Cal.Rptr.2d 595 (Cal. App. 1995):

The broad right to contract for the recovery of attorneys' fees in the event of litigation stems from Code of Civil Procedure section 1021: "Except [37 Cal.App.4th 425] as attorney's fees are specifically provided by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties...." Under this statute, parties may agree upon allocation of attorneys' fees. (Xuereb v. Marcus & Millichap, Inc. (1992) 3 Cal.App.4th 1338, 1340, 5 Cal.Rptr.2d 154.) Claims for attorneys' fees based on contract (for which we adopt the shorthand "contractual fees") may generally be recovered as costs by noticed motion. (Code Civ.Proc., 1033.5, subds. (a)(10)(A), (c)(5) [also allowing recovery on default judgment or by stipulation].)

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