The Importance of Professionally Drafted Contracts
The High Court dismissed a claim for a £2 million ‘success fee’ allegedly agreed over drinks in a luxury hotel and noted it was unlikely such an important and high value contract would been made orally.
The chairman of a hotel group had met with two representatives of a company that specialised in finding sources of finance. The chairman was alleged to have orally agreed during that the group would pay a 1 per cent success fee in the event of the company successfully introducing an appropriate lender to refinance the group.
The company claimed to have effected an introduction that resulted in a £200 million loan facility and claimed a success fee of £2 million. It launched proceedings after the group refused to pay.
The High Court found the account of the conversation in the bar given by the company’s representatives to be unreliable and noted there were no emails or other documentary evidence to support the existence of a finalised agreement. In the absence of such a contract, the Judge stated, the company had established no right to the success fee claimed.
Parker Lloyd Capital Limited v Edwardian Group Limited