What is a Retainership Agreement?
When hiring a lawyer, a retainership agreement can sometimes be used. This involves payment of a “retainer fee,” which is basically like a down payment paid from the client to the lawyer. The payment helps secure the lawyer’s service, and shows that the client is willing to hire the lawyer. Some of the payment funds may also be used for legal tasks throughout the course of the case. The funds are typically kept in their own separate account.
The rest of the legal fees may be paid later on or after the case is completed. They may be completed using a contingency fee or other type of fee arrangement.
Are Retainership Agreement Mandatory?
No, retainer fee agreements are not mandatory. There are no laws that require clients and attorneys to form a retainer agreement. Entering into such an agreement is completely voluntary and simply depends on the parties’ preferences.
However, if the parties do decide to form a retainer agreement, they should draft a written contract for the agreement. This will help them make the various terms clear, including the amount of payment, terms of use for the money, and remedies in case of legal conflicts. Once the contract is signed, it becomes enforceable under law.
What is a Retainership Agreement Violation?
Violations of retainer agreements can happen in many ways. These may include:
• Failure by the attorney to place the money in a separate account.
• Using the money for personal purposes rather than for assisting in the trial.
• Issues regarding payment terms and amounts.
Retainer fees usually can’t be refunded once they are paid. Thus, the client should exercise foresight when entering into a retainer agreement violation.
Remedies for agreement violations may usually involve a damages award. For instance, the lawyer may need to pay damages to make up for losses caused by using the retainer fee improperly.
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