Have you ever wondered whether those attorney fee clauses your attorney insists you include in your contracts really work? Or are they just words to be discarded when it comes time for a judge to make a decision in your lawsuit? Here is a true short story to show that those clauses really do work. The names have been changed to protect the innocent and avoid continuing to embarrass the guilty.

Those contractors who from time to time contract with Indian tribes* might take notice of a case from the United States Supreme Court. In 1998 the U.S. Supreme Court issued a decision in Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc. 523 U.S. 751 (1998). The facts are as follows: Manufacturing Technologies, Inc., entered into a stock purchase contract with the Kiowa Tribe. The transaction was secured by a promissory note. The tribe defaulted on the note and Manufacturing Technologies sued in Court for breach of contract.

We have all encountered it at one point or another – the boiler plate contract from the out of state general contractor or property owner that would require the California Contractor to resolve disputes, whether by mediation, arbitration, or litigation outside the state even where the work was performed in California. If you are now thinking of signing such an agreement, or have signed such an agreement and have a dispute brewing, do not be bullied into agreeing to an out of state forum or resolving the dispute out of state.