What is my right as 2nd Party-Regarding Success fee payment to 1st Party.
May 01, 2026
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Contract Law
► I had engaged a legal firm to assist with the settlement of my credit card dues. As per our agreement, I paid them a 2% advance fee of the total outstanding amount as a sign-up fee.
The agreement includes the following clause regarding fees:
“The second party has already paid 2% of the total outstanding amount in advance as a sign-up fee for the services provided by the first party. The first party shall also be entitled to a success fee of 8% of the total outstanding, as outlined in Annexure-A, payable upon receipt of the settlement offer. This 2% advance payment will be deducted from the total 10% fees at the time of payment of the settlement for each loan account.”
Recently, the bank independently contacted me via email and offered a settlement directly, without apparent involvement from the legal firm.
However, the legal firm has now:
Claimed that I am liable to pay the remaining 8% success fee
Sent me a second reminder notice
Warned of potential legal action if I do not pay
My Questions
Am I legally bound to pay the 8% success fee even though the settlement offer came directly from the bank and not through the legal firm’s efforts?
What is the best course of action in this situation?
What risks do I face if I refuse to pay?
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