Introduction agreements, finder’s fee agreements and intermediary agreements are a common occurrence especially where businesses are looking for a larger pool of potential parties to engage with or are seeking to rely on someone’s expertise to secure what they are looking for.
For example, they are common for:
- Early-stage businesses that are looking for investors
- Entities seeking commercial opportunities such as new customers/clients or premises
The advantages for the principal is that it provides them with a larger pool of potential opportunities than they may normally have access to as they effectively have access to make use of the introducer’s / finder’s ‘rolodex’. The principal also often does not have to pay for the intermediary’s services until the agreed objective has materialised.
The intermediary (ie, the introducer or finder) however runs the risk that they may not be remunerated for their efforts. We see situations where parties have been acting under poorly written agreements or under no agreements at all.
Accordingly, intermediaries and principals should ensure that they have clear contractual terms setting out the basis on which they will act and what they will be paid.
What goes wrong? Salient lessons from recent cases; do not end up being a “disappointed risk-taker”
The most common issues we see between introducers / finders / intermediaries and principals are:
- Failure to pay commission
- Disputes over who introduced the investor
- Disputes over effective cause
- Disputes over follow-on investments
- Oral agreement disputes
- Disputes over alternative transaction structures
We set out below salient lessons which have arisen from recent cases which parties engaged with introductions should ensure are covered in their agreements.
Can an introducer recover a fee without a written agreement?
The most common issue which arises is that intermediaries have failed to ensure that they have a written agreement in place. The result of this invariably leads to a dispute where the intermediary says that they had an oral agreement in place which is refuted by the principal. It then becomes a case of "he said, she said".
Typically intermediaries run arguments that the principal has been unjustly enriched through their efforts and that they should be compensated under the principle of quantum meruit / unjust enrichment (the amount s/he deserves). Courts will not always step in to rescue the situation.
For example, in MSM Consulting v Tanzania (2009), MSM had been working for about two years attempting to secure new premises for the Tanzanian High Commission. In that time, MSM failed to obtain a written (or even oral) commitment from the Tanzanian High Commission that they would be compensated for their work. Whilst MSM had provided draft written agreements, they had failed to ensure they were signed. MSM tried to argue that the High Commission had accepted the terms on various occasions which the High Commission denied. MSM claimed it was due 1.5% of the £6m purchase price the High Commission paid for the property (ie, just over £100k). The court rejected MSM’s claim and said the High Commission had not agreed to MSM’s terms.
The court rejected MSM’s quantum meruit claim on the basis that MSM had done work “in the hope that [it] would be awarded a contract which it might or might not receive”.
A similar issue arose in Moorgate Capital v HIG (2019). In that case Moorgate alleged HIG had promised at a drinks event to pay it £1m in the event that HIG acquired a target. The court rejected that an agreement had been concluded finding it difficult to believe that such an agreement for a significant amount would have been concluded at such an event especially where the principal could not remember talking to the intermediary. The court also rejected Moorgate’s quantum meruit claim finding that Moorgate “Having, without a contract, nevertheless provided services in the hope of payment or some other advantage, it was, in the circumstances of this case, merely a risk-taker. … That was a disappointment to Moorgate, which was therefore a disappointed risk-taker.”
Can an introducer recover a fee without a contract?
Whilst courts can be reluctant to assist introducers who operate without a clear agreement, there have been a series of decisions in which courts have stepped in where principals have clearly benefited from an introducer’s work.
In Premia Marketing v Regis Mutual Management (2021), Premia had introduced an insurer who engaged Regis. Whilst there was no written agreement, Regis had stated in emails that “Premia would receive some financial reward from Regis if … [their] introduction … bore fruit.” Accordingly, the court found that there was an implied agreement for the purposes of s15 Supply of Goods and Services Act 1982. Even if there had been no such agreement, the court determined that it would have found that Premia should be compensated for its efforts in quantum meruit (ie, unjust enrichment).
In DMA v Brazilian Nickel (2026), the court rejected the introducer's claim that the parties had agreed a "reasonable fee". However, it found that the introducer had provided valuable, non-gratuitous services and was entitled to recover a reasonable sum in unjust enrichment.
Where a restitutionary / unjust enrichment claim succeeds, market practice will invariably play a significant role in determining the value of the enrichment. In:
DMA, the court accepted that, in the market concerned, successful introducers were ordinarily remunerated through a commission calculated as a percentage of capital raised rather than by reference to hours worked or costs incurred. If no investment occurred then no fees would arise to be paid.
Matrix Receivables v Musst Holdings (2025), the court permitted a claim in unjust enrichment for services provided but had to determine whether enrichment was to be defined by reference to the services or the end-product. The court found that since the industry concerned was the raising of capital by third party investors for investment funds, it was market practice that the provider of the services normally took the risk of receiving no fee if there was no investment. On that basis, the enrichment lay in the end-product of committed investor capital (for limitation purposes) and therefore the starting point to measure the fee to be paid was a percentage based on the level of capital raised, not the time spent or expense incurred.
Ultimately, parties who fail to document their remuneration arrangements but introduce a successful investment will find that the value of the services is determined by expert evidence as to market practice rather than by any figure they had subjectively expected
What does "effective cause" mean in an introducer dispute?
Even where an intermediary has introduced a potential opportunity, that does not necessarily mean it is entitled to payment. A recurring theme in the authorities is that the intermediary must generally establish that its activities were the effective cause of the relevant transaction.
In DMA, the court held that an intermediary may still be the effective cause of a transaction even where the counterparty was already known to the principal, provided the intermediary's efforts revived discussions or materially contributed to the transaction proceeding. However, commission was limited to investments actually caused by the intermediary's services and did not automatically extend to later or more remote transactions.
Parties should therefore ensure that their agreements define precisely when commission becomes payable and whether repeat investments, subsequent funding rounds or successor transactions are intended to be covered.
What happens if the transaction closes on different terms?
Another issue which arises is where the parties have agreed that an introducer will only be paid if a particular price or result is achieved. In the rare instance of a case concerning an introducer agreement going to the Supreme Court, the parties in Barton v Morris (2023) had reached an oral agreement that an introducer would be paid £1.2m if they introduced a buyer to purchase a property for more than £6.5m. The introducer introduced a buyer who ultimately purchased the property for £6m after an issue concerning the construction of HS2 arose.
The Supreme Court found that there was no contractual entitlement for the introducer to be paid as the ‘strike price’ had not been achieved. Further where the parties had agreed that the introducer would only be remunerated if the agreed strike price was agreed, the introducer was not entitled to be a reasonable sum for the services they did perform under s15 Supply of Goods and Services Act 1982 or under the doctrine of unjust enrichment (ie because the agreement had defined how the introducer would be paid). Lady Rose determined that:
“When parties stipulate in their contract the circumstances that must occur in order to impose a legal obligation on one party to pay, they necessarily exclude any obligation to pay in the absence of those circumstances; both any obligation to pay under the contract and any obligation to pay to avoid an enrichment they have received from the counterparty from being unjust.”
Similarly, in Contra v Bamford (2022) (upheld by the Court of Appeal), the introducer agreement in question clearly specified that the introducer would be paid if there was a sale of a business. In that case, no sale of the business occurred but instead there was a divestment/restructuring to achieve the desired aim. The court dismissed the introducer’s claim that it should be paid for its efforts as the result specified in the agreement (ie the sale of the business) had not occurred. In doing so, the court rejected the argument that the court should imply a term that an alternative disposal achieving the aims of what the parties wanted should result in the introducer being rewarded given that the terms of the agreement of what had to happen for the introducer to be paid was clear.
Further, in Cantor v YES Bank (2023), the introducer agreement specified that the introducer would introduce specified names to provide capital in the bank by way of “private placement, offering or other sale of equity instruments in any form”. Ultimately, certain entities listed in the introducer agreement did invest capital in the bank by way of a public offering rather than by way of a private placement. The court rejected the introducer’s claim on the basis that the specified result of raising capital by way of a private placement did not extend to a public offering.
The lesson is that courts are unlikely to rescue parties from a badly drafted success fee structure. If commission is intended to be payable where a transaction substantially achieves the parties' objective, but not in precisely the form anticipated, that should be stated expressly.
Can an introducer claim commission after the agreement has ended? What is the ‘long tail’?
The case of Kinled Investments v Zopa Group (2022) also demonstrates not only the need for intermediaries to carefully consider the terms under which they are operating but also what they are being asked to do and when. In that case, Kinled had acted as an introducer to Zopa. Kinled had introduced an investor to purchase shares in Zopa as part of its investment for which Zopa paid Kinled 3% of the amount invested.
However, Kinled wanted to be paid for a subsequent investment round which resulted in further investments. Kinled argued that whilst their initial engagement letter had expired, the terms of that had been orally extended during a breakfast meeting to a later date to cover the further investment round in the event that it introduced an investor.
The court found that on the facts of the case, there was no agreement extending the terms of the initial engagement letter or that it would cover the period for which Kinled was now claiming. Further, the court rejected Kinled’s quantum meruit argument on the basis that Kinled’s activities in the second round were speculative and it knew it ran the risk of not being rewarded for its activities.
Kinled demonstrates the importance of carefully drafted "tail" provisions. Many intermediaries expect to be remunerated where an introduction ultimately bears fruit months or years later. Unless the agreement clearly identifies how long commission protection lasts and which subsequent investments are covered, the intermediary may have no entitlement to payment despite making the original introduction.
Is the principal authorised to enter into an agreement?
Another issue which arises is whether a principal actually has authority to enter into an introducer agreement. In MSN for example, the intermediary had failed to appreciate that Tanzanian law relating to the procurement by public offices of goods and services required the High Commission to go through a tendering process with possible suppliers of services such as an estate agent.
Are the intermediaries’ activities regulated?
Intermediaries should carefully consider whether their activities constitute regulated activities for the purposes of the Financial Services and Markets Act 2000 ("FSMA"). This is particularly important where they are involved in raising investment, arranging investments or providing advisory services in relation to investments.
Recent decisions demonstrate courts are reluctant to allow principals to rely on alleged FSMA breaches as a means of avoiding payment for valuable services received. In Kinled, the court concluded that the intermediary had carried on regulated activities, but rejected the principal's attempt to recover commission which had already been paid. Similarly, in H&P Advisory v Barrick Gold (2025), the court rejected an illegality defence based on FSMA breaches as a basis in which a principal could avoid payment.
Nevertheless, neither decision should be taken as reducing the importance of regulatory compliance. The fact that a principal may remain liable to pay for services does not mean the intermediary avoids regulatory consequences.
Introducers and advisers who undertake regulated activities without the necessary authorisation may still face criminal, civil or regulatory consequences under FSMA, regardless of whether they ultimately succeed in recovering their fees. Businesses operating in this area should therefore ensure that they have considered at an early stage whether their proposed activities require FCA authorisation or fall within an applicable exemption.
Introducer agreement checklist; avoid being a “disappointed risk-taker”
If you are acting as an intermediary, you should make sure that you have a signed written agreement which clearly sets out on what basis you are acting. Clear written agreements also protect principals as well.
Examples of matters which you should consider as part of your checklist for such agreements include:
- What you will be paid
- What has to happen for you to be paid
- Whether you will only be paid if a certain event / result is obtained (such as a specified price) and what will happen if that event does not occur (ie, will you be remunerated for services even though the event / result does not occur)
- Whether payment is only due if you are the effective cause of the transaction
- What you are being asked to do such as:
- Whether the principal and/or you have to disclose your contacts to each other
- Whether the services are limited to a particular territory
- Whether you are authorised to negotiate on the principal’s behalf or bind the principal
- What the duration of the agreement is
- What the long tail is – ie, if you introduce an investor, by when do they have to complete their investment for you to be paid
- What happens if the principal does not close the round, or the round does not complete because another investor pulls out
- Whether commission extends to follow-on investments, refinancings, restructurings, public offerings, options, warrants, successor transactions or alternative transaction structures achieving the same commercial outcome
- What the principal has to disclose to you – ie if an investor decides to invest
- Whether the principal warrants that they have the authority to enter into the agreement
- Whether fees are payable for re-introductions of contacts already known to the principal
- Wow the fee is to be calculated if no specific transaction structure is ultimately adopted (for example equity investment, debt funding, restructuring or alternative financing arrangements)
Intermediaries should also ensure that their activities do not constitute regulated activities requiring FCA authorisation. Whether authorisation is required will depend on the facts and specialist advice should be sought where appropriate. The warning in Kinled remains important:
“I have decided that the services Kinled provided are regulated activities, so that, if this decision is publicised, service providers … will be more aware of the possibility that they require authorisation and will be less able to rely on [on the defences set out under] s.28 of FSMA.”
When should you seek legal advice?
A small investment up front in seeking the advice to ensure you are protected may prevent an intermediary running the risk of receiving no return on its investment and efforts at all. It may help avoid protracted and expensive disputes later on.
For more information about introducer, intermediary and finder fee agreements and activities, please contact the author of this article.