Does the contract at issue have an attorney fees clause, and why does that matter?

This is worth checking in your lease or vendor agreement immediately, before taking any other step in your defense. Most commercial leases and vendor supply agreements contain an attorney fees clause, and under California Civil Code section 1717, these clauses are made reciprocal by statute even when the original contract language was written to favor only one side, meaning whichever party ultimately wins the case can recover their attorney fees from the losing side, regardless of how the clause was originally drafted.

The practical financial impact of this can be substantial: a $24,000 underlying claim with an attorney fees clause attached can realistically balloon into a $60,000 total exposure once legal fees on both sides are factored in. The reciprocal nature works in your favor too, though, if you ultimately prevail in the case, the other side would generally owe you your attorney fees as well, which is worth factoring into your overall strategy and any settlement negotiations.