Drafting Attorney’s Fee Provisions in Construction Contracts

Reviewed September 7, 2026.

If a construction contract is intended to shift legal fees, say so clearly and review the consequences before signing. A general indemnification provision may address third-party claims without providing fees for a dispute between the owner, contractor or subcontractor.

Sage Systems, Inc. v. Liss, 39 NY3d 27 (2022), confirms that courts require clear contractual intent to depart from the usual rule that each party pays its own legal fees.

Terms worth addressing

• Which disputes qualify: unpaid invoices, breach claims, arbitration, appeals and judgment enforcement.
• Whether recovery is mutual and how the agreement defines the party entitled to fees.
• How partial success, settlement and counterclaims affect recovery.
• Whether the clause is consistent with consumer protections and other applicable law.

Statutory fee remedies must be checked individually. A construction dispute or late payment does not itself create an automatic right to attorney's fees under the Prompt Payment Act or the Lien Law. The contract, remedy pursued and supporting facts matter. Avoid treating a fee provision as a promise that litigation will cost nothing.

Kushnick Pallaci PLLC assists clients throughout New York with construction contract drafting and review. Contact 631-752-7100 or vtp@kushnicklaw.com.

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