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 8^th Circuit opinion in DocMagic, Inc. v. The Mortgage Partnership of America, L.L.C., 729 F.3d 808, 2013 U.S. App. LEXIS 18329 (8^th 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.