Barton v Jones & Ors

A concluded contract for an introduction fee may arise from discussions and conduct even where negotiations for the associated land sale were expressed to be subject to contract. The phrase does not automatically extend to a separate agreement concerning payment for introducing a purchaser.

Where parties have defined their contractual allocation of risk, unjust enrichment should not ordinarily be used to impose a different payment obligation. Free acceptance does not justify recovery merely because the defendant obtained a benefit and the contract did not address an unanticipated contingency. Relief requires a principled basis for interfering with the parties’ contractual choices.

The appellant claimed that Foxpace Limited owed him an introduction fee after it sold Nash House to a purchaser whom he had introduced. He advanced contractual and alternative unjust enrichment claims.

The court found that the parties had agreed a fee of £1.2 million if the introduced purchaser bought the property for £6.5 million. The property was sold for £6 million. The central issues were whether a binding contract existed, whether it was subject to contract, and whether unjust enrichment could provide relief when the contractual condition for payment was not satisfied.

1. Contract formation. The court found that discussions between the appellant and the respondent’s representative during 29–31 July 2013 created a binding contract. The essential terms were sufficiently certain: Foxpace would pay £1.2 million if the appellant introduced a purchaser who bought Nash House for £6.5 million. Later discussions concerned ancillary payment arrangements and did not prevent formation of the contract.
2. Subject to contract. The earlier negotiations for the sale of Nash House were subject to contract, but that qualification did not govern the separate introduction-fee agreement. The land sale required formal written terms; the introduction agreement was simple and did not require writing. The respondent’s conduct, including inviting the introduction before a written fee agreement existed, supported that conclusion. The authorities relied on concerning subject-to-contract negotiations were distinguishable.
3. Contractual claim. The property sold for £6 million. The express condition for payment was therefore not satisfied. The court did not decide what liability, if any, would have arisen on a sale above £6.5 million.
4. Unjust enrichment. The introduction enriched Foxpace and was provided at the appellant’s expense. However, the parties had made a contract which allocated the relevant risk. The court should be slow to impose a different obligation through unjust enrichment, particularly where the precise contingency had not been contemplated. The service provided was the same service contemplated by the contract, not a service over and above it. The free acceptance doctrine therefore did not apply.
5. Valuation. Although unnecessary to the result, the court considered that the objective value of the introduction would have been 7.25% of the sale price, or £435,000, rather than £1.2 million.
6. The appeal was dismissed. Foxpace was not liable in contract or unjust enrichment.

The judgment does not state the terms of any earlier decision under appeal beyond identifying the challenged decision of the respondent as convener of the deemed consent procedure. The court joined Foxpace Limited as a respondent and determined the underlying indebtedness issue by agreement.