Who Is The Prevailing Party In A Lease Agreement

The disputed tenancy agreement provided: “When legal proceedings are initiated to enforce or interpret the provisions of the tenancy agreement, the litigant has the power, in such an action, to recover the reasonable legal costs it incurred in connection with such an action.” Following a dispute during the trial phase of the case, the court granted an application for sanction from the owner. By imposing the ultimate sanction, the court rejected all of the tenant`s claims, so that only the lessor`s claims remained before the court. Prior to a trial, the owner requested that the court declare that the owner is the “dominant party” so that he could recover his costs. This request was accepted. A final remark – although the court did not award expert fees to the party in power, the court had no difficulty in using the fees collected by the defendant`s lawyers when preparing the expert witness for trial, in accordance with the “dominant party” rental clause! Landlords (and tenants) should not accept the language of the “dominant party” in a tenancy agreement as the beginning and end of the analysis on the collection of legal fees and fees. In addition, civil regulation provides a valuable tool when used to support and counter a provision in the lease that allows for the recovery of legal fees. The impact of this judgment and the “dominant part” of the legal fees was that the tenant now faces a terrible dilemma. The court had found that the tenant had to pay the lessor the significant costs associated with defending the lessor`s action up to that date. If the tenant came to court, he would have more fees to pay to his own lawyer and would take a significant risk that he would also pay aGG as the landlord`s lawyer. As a result, the tenant tried to negotiate a transaction in which some, but not all, of the landlord`s fees were negotiated. The tenants and landlords entered into a commercial lease that required the landlord to deliver the premises until a specific date. Delivery was delayed by 825 days and the tenant applied for a rental credit of $3,000,000. Prior to the trial, the landlord made two offers in due course to settle for $1 million and $1.5 million, which the tenant refused.

In court, the tenant received $650,000 in damages, far less than the liquidation damages offered by the landlord. “In the event of litigation related to the purpose of this agreement, the dominant party is entitled to receive reasonable legal fees and fees from the other party.” The dominant party is determined on the basis of an assessment of the party that could have imposed the party`s arguments or positions in the arbitration proceedings or in the courts against the other party`s arguments or positions. This assessment should include the assessment of the following: the amount of the net amount of recovery; The main issues challenged by the parties; Whether the amount of the arbitration award represents a significant percentage of the amount requested by the applicant; and the most recent comparative positions of the parties. Lawyer`s fee clauses are important mechanisms for avoiding lawsuits lightly and encouraging out-of-court settlement of disputes, but these clauses – including the example above – often pay off by not defining what it means to be the so-called “dominant party.” In the absence of a definition or explanation, the term “dominant party” indicates that the dispute will result in a winner and a loser that is easy to determine.