When a principal engages an agent to bring about a transaction, many would reasonably assume that to claim their commission, the agent should have been the effective cause of, or minimally have done some work on, the transaction. After all, there is no such thing as a free lunch – or is there?
In Turms Advisors APAC Pte Ltd v Steppe Gold Ltd [2024] SGHC 174, the Singapore High Court (“Court“) found that the contract between the parties did not contain an express term that the agent had to be the effective cause of the transaction (“effective cause term“). This raised the following questions – could an effective cause term then be implied into the contract? If the agent was not entitled to its commission, could it claim a reasonable quantum meruit, i.e. a reasonable sum in respect of services supplied?
In this Update, we look into the Court’s reasoning as to why the agent was not required to be the effective cause of the transaction in the circumstances, as well as its answers to these questions.
The defendant was successfully represented by Deputy Managing Partner Kelvin Poon, SC, Partner Devathas Satianathan, and Associate Timothy James Chong of Rajah & Tann’s International Arbitration Practice.
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