Is a one-way attorney-fee clause enforced as written in Oregon?
No. In an action or suit on a claim based on a contract that specifically provides that attorney fees and costs incurred to enforce its provisions shall be awarded to one of the parties, the party that prevails on the claim is entitled to reasonable attorney fees in addition to costs and disbursements, without regard to whether it is the party specified in the contract and without regard to whether it is a party to the contract (ORS 20.096(1)). Fees provided for in such a contract are not subject to waiver by the parties to a contract entered into after September 9, 1971, and a provision in such a contract providing for a waiver of attorney fees is void (20.096(2)). 'Contract' includes any instrument or document evidencing a debt (20.096(3)). Who prevails is itself a statutory question: the prevailing party on each claim is the party that receives a favorable judgment or arbitration award on that claim, determined claim by claim and in every proceeding including arbitration, trial and appeal (ORS 20.077(1)-(2)); on appeal the court may in its discretion designate as prevailing a party that obtains a substantial modification of the judgment (20.077(3)), and 20.077 creates no fee claim of its own (20.077(4)). A prevailing party keeps a fee award authorized by the contract or by statute even though it prevailed by asserting that the contract is void in whole or part, that it is unenforceable, or that the prevailing party was not a party to it (ORS 20.083). Where an assignee sues on the contract, the maker of the contract and the assignee that sued are severally liable for fees and costs awarded to the defendant (ORS 20.097(1)).
The trap
A clause awarding enforcement fees only to the lender or landlord works for the borrower or tenant who prevails on the contract claim, and a provision in such a contract waiving attorney fees is void (20.096(1)-(2)). Winning by attacking the contract does not forfeit the fees: 20.083 awards them to a party that prevails by showing the contract void, unenforceable, or not its own. And buying the paper does not insulate the original lender, because in an action on the contract by an assignee the maker is severally liable for the defendant's fees (20.097(1)).
6 authorities
- statuteORS 20.096enactment date not established
The words that state the rule
In any action or suit in which a claim is made based on a contract that specifically provides that attorney fees and costs incurred to enforce the provisions of the contract shall be awarded to one of the parties, the party that prevails on the claim shall be entitled to reasonable attorney fees in addition to costs and disbursements, without regard to whether the prevailing party is the party specified in the contract and without regard to whether the prevailing party is a party to the contract. (2) Attorney fees provided for in a contract described in subsection (1) of this section shall not be subject to waiver by the parties to any such contract that is entered into after September 9, 1971. Any provision in such a contract that provides for a waiver of attorney fees is void.
- statuteORS 20.096enactment date not established
The words that state the rule
As used in this section and ORS 20.097, “contract” includes any instrument or document evidencing a debt.
- statuteORS 20.077enactment date not established
The words that state the rule
In any action or suit in which one or more claims are asserted for which an award of attorney fees is either authorized or required, the prevailing party on each claim shall be determined as provided in this section. The provisions of this section apply to all proceedings in the action or suit, including arbitration, trial and appeal. (2) For the purposes of making an award of attorney fees on a claim, the prevailing party is the party who receives a favorable judgment or arbitration award on the claim.
- statuteORS 20.077enactment date not established
The words that state the rule
Notwithstanding subsection (2) of this section, upon appeal of a judgment in an action or suit in which one or more claims are asserted for which the prevailing party may receive an award of attorney fees, the appellate court in its discretion may designate as the prevailing party a party who obtains a substantial modification of the judgment. (4) This section does not create a claim to an award of attorney fees in any action or suit in which the court or arbitrator is not otherwise authorized or required to make an award of attorney fees by contract or other law.
- statuteORS 20.083enactment date not established
The words that state the rule
A prevailing party in a civil action relating to an express or implied contract is entitled to an award of attorney fees that is authorized by the terms of the contract or by statute, even though the party prevails by reason of a claim or defense asserting that the contract is in whole or part void, a claim or defense asserting that the contract is unenforceable or a claim or defense asserting that the prevailing party was not a party to the contract.
- statuteORS 20.097enactment date not established
The words that state the rule
In any action or suit on a contract by an assignee of any right under that contract, the maker of that contract and the plaintiff in the action or suit on that contract shall be severally liable for any attorney fees and costs that may be awarded to the defendant in the action.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.