This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
Take a typical situation: a Florida deal closes with a seller note for part of the price. The buyer’s counsel drafts the note the way lenders’ counsel always drafts notes — if the holder has to sue to collect, the maker pays the holder’s attorneys’ fees. One-way, in the seller’s favor, standard as they come. Two years later the buyer stops paying, claims offset rights against the note based on alleged indemnity claims, and litigation follows. The buyer wins. And then the buyer’s lawyers file a fee motion — under a clause that, by its terms, runs only in the seller’s favor. In most states that motion goes nowhere. In Florida, it very likely succeeds, because the legislature rewrote the clause forty years ago and everyone who signs a one-way fee provision in a Florida contract is deemed to know it.
Subsection (7) turns every unilateral fee clause into a prevailing-party clause
The mechanism is Fla. Stat. § 57.105(7). Most of section 57.105 is about sanctions for frivolous claims, which is how deal lawyers overlook the last subsection. It provides that when a contract allows attorneys’ fees to one party required to take action to enforce the contract, the court may also allow reasonable fees to the other party when that party prevails — as plaintiff or as defendant — in any action with respect to the contract. It applies to every contract entered into on or after October 1, 1988. The statute exists to level drafting power: the party with the pen cannot give itself fee-shifting and deny it to the counterparty. Florida courts apply it routinely, and the Florida Supreme Court has read the reciprocity broadly enough to reach parties defending on the contract even in postures the drafter never imagined.
Notice what this does to drafting leverage. A one-way clause does not stay one-way; it becomes mutual by operation of law. So the real choice in a Florida-law document is never “fees for me only.” It is mutual fee-shifting or the American rule, each side bearing its own. Drafters who think they chose the first option have often actually chosen mutual exposure without pricing it.
The purchase agreement may escape, but the ancillary documents rarely do
Middle-market purchase agreements are frequently governed by Delaware law, and section 57.105(7) is a Florida statute construing Florida contracts. But look at what surrounds the purchase agreement in a Florida deal. The seller note and any guaranty are often Florida-governed, because the maker, the collateral, and the enforcement venue are all in Florida — the same reason those instruments deserve attention under Florida’s usury rules. The lease assignments are Florida documents. The NDA signed at the top of the process, the letter of intent, the consulting and transition services agreements, the escrow agreement with a Florida agent — any of them may carry Florida law and a fee clause somebody pasted in from a form. Each one-way clause in that stack is, in substance, a mutual clause. A buyer who guaranteed nothing but drafted itself fee rights in the note has also underwritten the seller’s legal bill in a collection fight it loses.
The interaction with the indemnification architecture deserves particular care. Indemnity definitions of “Losses” routinely include attorneys’ fees, and the parties then negotiate baskets, caps, and survival periods around them. A separate prevailing-party fee clause — or a one-way clause made mutual by the statute — can run around that architecture: a party that wins an indemnity dispute may recover fees as fees, outside the cap math the parties thought contained their exposure. If the intent is that fee exposure lives inside the indemnity caps, the documents should say so, and the fee clause should be drafted or deleted deliberately rather than inherited from a form.
Litigation posture changes when both sides can recover fees
Fee reciprocity is not just a drafting curiosity; it reprices disputes. First, it strengthens the defense. A seller facing a marginal indemnity claim under a note with a fee clause knows that winning means fee recovery, which stiffens resistance to nuisance-value settlement. Second, it raises the stakes of aggressive claims: a buyer who withholds a milestone payment on a theory that fails at trial may pay its own lawyers and the seller’s. Third, it interacts with claim selection. Florida plaintiffs often plead contract and tort theories together — and where the economic loss doctrine and non-reliance provisions channel disputes into or out of contract, as they do in M&A fraud litigation, the availability of contractual fees can differ claim by claim. Whether the prevailing party on a contract count can recover fees incurred litigating an intertwined fraud count is exactly the kind of allocation fight that consumes a second round of briefing. Cleaner drafting up front avoids financing that round.
Draft the clause you actually want
The practical rules fall out simply. In any Florida-governed deal document, treat every fee clause as mutual regardless of what it says, and negotiate accordingly. If mutual fee-shifting is acceptable, write it as an express prevailing-party clause with the mechanics thought through — who is a prevailing party in a case with mixed outcomes, whether fees include appellate and enforcement proceedings, and how the clause coordinates with indemnity caps. If mutual exposure is not acceptable, delete the clause entirely and live with the American rule, because the one-way version is not available at any price. And when a form document arrives with lender-style fee language, assume section 57.105(7) is standing behind the counterparty’s signature block, because in Florida it always is.
The takeaway
Florida abolished the one-way attorney fee clause for contracts signed since October 1988. Section 57.105(7) hands the counterparty a mirror image of whatever fee rights the drafter reserved, in any action on the contract, win as plaintiff or as defendant. In deal practice the statute hides in the ancillary stack — seller notes, guaranties, NDAs, escrows — where Florida law governs even when the purchase agreement does not, and it can outflank a carefully built indemnity cap by moving fees outside it. None of this is dangerous to parties who draft with the statute in view. It is only dangerous to parties who think the clause they wrote is the clause they have.
If you are negotiating a Florida deal and want the fee provisions, seller note, and indemnity architecture pulling in the same direction, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
