Which clause affects the recoverability of attorney's fees and court costs in a lawsuit?

The prevailing party clause is significant in determining whether a party in a lawsuit can recover attorney's fees and court costs. This clause typically stipulates that the party who wins the case (the prevailing party) is entitled to be reimbursed for the legal expenses incurred during the litigation. This incentivizes parties to pursue or defend claims with the knowledge that they may not bear the full financial burden of legal proceedings if they prevail.

The presence of a prevailing party clause can influence the behavior of parties engaged in legal disputes, potentially encouraging settlement negotiations and discouraging frivolous lawsuits. Without such a clause, each party might have to absorb their own legal fees regardless of the outcome, which could lead to inequities in cases where one party is clearly in the right.

The other options, while relevant to various aspects of contracts and legal situations, do not address the specific recoverability of attorney's fees and court costs. For example, a cost plus fixed fee arrangement pertains to compensation structures in contracts but does not inherently allow for fee recovery in lawsuits. The force majeure clause deals with unforeseeable circumstances impacting contract performance, and the notice of claim clause typically requires a party to notify others of a potential claim, which is procedural rather than directly tied to the recovery of legal fees