Commercial Litigation – Breach of Contract Case Study

Pearson Solicitors Commercial Litigation team recently acted in a dispute between a Land Agent and a national home builder. Summary by litigation solicitor, Nicola Laurie.

We recently acted on behalf of a Land Agent who was in dispute with a national home builder over its introduction fee. The Land Agent introduced a large piece of land to the home builders and it was agreed that they would pay the Land Agent a 2% introducers fee for the contact details of the sellers of the land, if the home builder was successful in acquiring the site through an ‘off market’ acquisition. It was further agreed that in the event that the site was placed ‘on market’ that the home builder could seek to renegotiate the level of fee payable to the Land Agent before it put forward an offer of tender in order that it may remain competitive. This was confirmed in writing by the home builder.

The dispute

The site was subsequently placed ‘on market’ and the home builder was successful in acquiring the land following a competitive bidding process. The home builder however, failed to renegotiate its fee with the Land Agent and as such the Land Agent invoiced the home builder for its 2% fee following the completion of the purchase. The home builder then disputed that any fee was payable to the Land Agent on the basis that the site was not acquired ‘off market’ and it further argued that the Land Agent had failed to complete all its obligations under the contract resulting in the fee not being payable.

Mediation suggested

We were instructed to issue proceedings for breach of contract in order to recover the introducer’s fee payable to the Land Agent under the agreement made between the two parties. Unsurprisingly, those proceedings were rigorously defended by the home builder and the matter was listed for Trial. At that point the home builder suggested mediation (which it had previously rejected).

The parties both attended at mediation with open minds and good intentions. After a day long negotiation involving detailed financial analysis the outcome of the mediation was a success, with the Land Agent securing a global sum in excess of £100,000 respect of its fee along with its costs of the proceedings from the home builder. By agreeing to settle for a lower figure than the amount originally claimed, the Land Agent removed the risk of proceeding to Trial where the decision as to whether its fee was payable would have come down to the Judge hearing the claim.

Contact us

Pearson Solicitors Litigation team act as trusted advisers to landlords, tenants, agents and developers in relation to property issues to help avoid problems proactively and provide representation at mediation and in court proceedings when required. Call 0161 785 3500 or email enquiries@pearsonlegal.co.uk.

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Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

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