News: Contract Law
Contract law training: Corporate financier looks to 'oral agreement' loophole
11 November 2008
The effects of contract law training are being put to the test in the City as corporate finance house Cenkos Securities seeks to sue an investment firm over £1.4 million in unpaid fees.
According to the Times, Green Park Ventures (GPV) was not asked to sign a written agreement when it received £20 million in financing from Cenkos, but the latter is depending on an enforceable "oral contract" being deemed valid.
"To support its claim, Cenkos says that senior executives at GPV agreed to a contract, including the fee terms, in a series of meetings and telephone calls where commission rates were discussed," notes the publication.
Regarding the £20 million deal, organised to fund an energy enterprise, Cenkos and another independent investment banker claim they are entitled to a pre-agreed seven per cent commission that amounts to £1.4 million.
News of the lawsuit, which has been filed at London's high court, follows a recent warning from contracts solicitor Allis Karim about the business dangers presented by a lack of contract law training.
The legal expert told the Cambridge Network that not putting contracts in writing and "placing too much trust" in other parties are top of the list.
