A contract can make all the difference. If the parties had a written contract with language that clearly specified a party's entitlement to recover legal fees in the event that the contract was breached, courts may be inclined to enforce it. In the scenario above, however, Bill the buyer had no written contract. Under certain state and federal laws, the winning party is entitled to recover legal fees from the loser in a legal dispute. Depending on the language of the law, the entitlement to recover legal fees can be automatic - all it takes is winning the case and proving that the law was violated.
Every court system has rules, called court rules, that govern procedures for lawsuits.
Court rules often give judges discretion to order one party to pay some or all of the other's legal fees and expenses when certain situations occur, such as a party has disobeyed a valid order of the court. As examples of this punishment, the court can command him or her to pay the other party's legal expenses and costs. This author, in her 13 years as a lawyer, has found that courts are very reluctant to do this. In conclusion, please keep these ideas in mind. Where small amounts of money are involved, the legal fees can vastly exceed the amount at stake.