London calling… No term, and no pay

The Supreme Court has held that the seller of a property in London was not, in the circumstances, contractually obliged to pay an introducer a reasonable fee for their services.* In doing so, the Supreme Court considered the law of implied terms and unjust enrichment.

Background

A seller and an introducer had entered into an oral agreement whereby the seller would pay a fee of ￡1.2m if the seller's property was sold for ￡6.5m to a purchaser that had been introduced. Following an eventual sale for only ￡6m, the seller argued that the contract did not oblige it to pay any fee. The introducer brought a claim for reasonable remuneration.

Decision

The majority of the Supreme Court found that:

1. the contract contained no express term obliging the seller to pay a fee if the property had been sold for less than ￡6.5m;
2. a term that the introducer would be paid a reasonable fee was not implied in fact – this would have contradicted the express terms, there was no particular amount that the parties would obviously have agreed on had they been asked, and it also was not necessary to imply this term for business efficacy;
3. such a term could not be implied in law – a statutory provision did not apply as fees had been addressed by the contract, and in the circumstances, the alleged term was not an incident of the contract in question; and
4. the introducer could not rely on the law of unjust enrichment either, as an obligation to pay when there was no sale for ￡6.5m would have been inconsistent with what had been agreed by way of express terms.

Overall, therefore, we consider that the Supreme Court allowed the contract (and its silence) to do the talking in this case. When negotiating and forming a contract, careful consideration should be given to the scope of its terms.

* Barton v Morris [2023] UKSC 3