Pursuing Contract Claims For $10,000 Or Less

Authored by Mark Reinecke    

If you find yourself in a contract dispute where the amount to be gained will not justify the cost in legal fees, there may still be options. If your contract includes an attorney fee provision, you can seek a judgment plus attorney fees incurred to obtain compliance. If your contract does not include an attorney fee provision, you may still be able to obtain an award of attorney fees as discussed below.

The Oregon legislature long ago recognized that if someone causes physical injury to persons or property but the damages are relatively small compared to the legal costs, those responsible for the damages may escape liability. Oregon Revised Statute (ORS) 20.080 was created to allow those injured to collect attorney fees in addition to damages for smaller cases (currently $10,000 or less). Although it was clear that the statute applied when “physical” injury to persons or property (a “tort”) was proven, an inconsistency arose among Oregon circuit courts concerning whether recovery of fees in “contract” actions was permitted under ORS 20.080. In 2001, the Oregon legislature addressed the inconsistency by enacting ORS 20.082 which allows for the recovery of attorney fees for breach of contract cases seeking (currently) $10,000 or less. Even if the actual amount of a claim exceeds $10,000, some litigants will limit their claim to $10,000 to enable them to take advantage of the statutory provisions. Recovery of fees in such cases requires written demand for payment at least 20 days before a lawsuit is filed.

An alternative strategy is to pursue your case in Small Claims Court, which provides a simplified procedure for resolving civil disputes seeking $10,000 or less. (Think “The People’s Court”.) In Oregon Small Claims Court, attorneys are not permitted to be present with you in court but they can assist you preparing for court and in post-judgment collection proceedings. Post-judgment proceedings include seeking to collect your judgment by pursuing the defendant’s assets including real property, bank accounts and wages.

If you are unable to resolve your contract disputes seeking $10,000 or less, you can seek a judgment in small claims court or you can seek a judgment and reimbursement of attorney fees through a statutory claim in circuit court.  If you have questions or are unsure how or whether to proceed in a case, consult an attorney experienced in contract litigation.