Under California law, the recovery of attorneys’ fees are authorized by statute in a variety of situations. Among these are contract disputes.

The “prevailing party” in a contract dispute is entitled to recover their attorneys’ fees and costs, if the contract provides for attorneys’ fees to the prevailing party. Even if the contract authorizes attorneys’ fees for only one named party, the other party may still recover attorneys’ fees if it is the prevailing party. [Cal. Civil Code, Section 1717] As a result, a defendant in a lawsuit may recover attorneys’ fees if it is the prevailing party, even if the contract only authorized attorneys’ fees for the plaintiff.

A prevailing party is “the party who recovered a greater relief in the action on the contract.” [Cal. Civil Code, Section 1717 (b)(2)]