Prevailing Party Clauses – Draft With Care

Drafting a ‘prevailing party’ clause requires more care than one might assume. This point is highlighted by the recent 8th Circuit opinion in DocMagic, Inc. v. The Mortgage Partnership of America, L.L.C., 729 F.3d 808, 2013 U.S. App. LEXIS 18329 (8th Cir., Sept. 4, 2013). DocMagic entered into an agreement with Lenders One, whereby Lenders One would supply DocMagic with a list of its members so that DocMagic could solicit new clients for its mortgage loan preparation software. Id. at *2. The agreement contained a choice of law provision, which selected Missouri law. Missouri law [1] The agreement also contained a ‘prevailing party’ clause, which merely stated that “the prevailing party shall be entitled to reasonable legal fees and other costs and expenses incurred in resolving such dispute….” Id. *3.

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