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Contingency Contract Aba

Contingency Contract ABA: A Guide to Understanding the Basics

If you`re considering pursuing legal action against someone, but you don`t have the resources to pay for the legal fees upfront, you may want to consider entering into a contingency contract with an attorney. This type of agreement is often used in cases where the potential payout is significant, but the plaintiff doesn`t have the financial means to pursue the case independently.

What Is a Contingency Contract?

A contingency contract is a type of legal agreement between a client and an attorney. Under this arrangement, the attorney agrees to take on the case and work on a “contingency fee” basis. This means that the attorney will only be paid if the case is successful. If the case is lost, the attorney will not receive any payment.

How Does a Contingency Contract Work?

Under a contingency contract, the attorney typically agrees to take on the case with no upfront fees. Instead, the attorney will take a percentage of any settlement or award that the client receives. The percentage that the attorney is entitled to depends on the specific agreement made between the attorney and the client.

In general, contingency fees for personal injury cases range from 33% to 40% of the total award. In some cases, the fee may be as high as 50%. For other types of cases, such as breach of contract or fraud claims, contingency fees may be lower.

What Are the Benefits of a Contingency Contract?

One of the main benefits of a contingency contract is that it allows clients who would not otherwise be able to afford legal representation to pursue legal action. By entering into a contingency agreement, clients can avoid the upfront costs associated with hiring an attorney and can focus on recovering from their injury or loss.

Another benefit of a contingency contract is that it aligns the interests of the client and the attorney. If the case is unsuccessful, the attorney will not receive payment, which provides an incentive for the attorney to work hard to achieve a positive outcome.

What Are the Risks of a Contingency Contract?

One risk of a contingency contract is that the percentage of the award that the attorney is entitled to can be high. If the case is successful, the client may find that a significant portion of their award goes to the attorney.

Another risk of a contingency contract is that the attorney may only take on cases that they believe have a high likelihood of success. If the attorney does not believe that your case is likely to succeed, they may decline to take on the case or require a higher percentage of the award as a contingency fee.

Conclusion

A contingency contract can be an excellent option for clients who need legal representation but cannot afford the upfront costs of hiring an attorney. By entering into a contingency agreement, clients can avoid the financial burden of legal fees and focus on recovering from their injury or loss. However, it`s important to carefully consider the risks and benefits of a contingency contract before entering into an agreement with an attorney.

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