There's an old adage that "an oral contract is worth the paper it's written on," but that isn't always true -- and people who underestimate the legalities of a handshake bargain sometimes find out, to their dismay, that they're going to be held to their word.
This was the lesson learned by a Florida power company after its former director of project developments made a verbal agreement with a realtor at a decidedly unbusiness-like setting: a university's tailgate party in 2008.
Essentially, the realtor was guaranteed a finders fee, or commission, for a parcel of land he scouted out for the power company's development team. The farmland, not yet on the market, was an ideal property for the industry to develop. The power company went ahead and bought the farmland the realtor had clued them onto for around $75 million -- but shut the realtor out in the cold without his $1.5 million dollar commission.
Apparently, the company thought that a verbal agreement and a handshake in less-than-formal circumstances wasn't enough to hold them legally liable -- but Florida has rather strict rules on oral agreements. They are largely binding.
The power company's executives insisted that they had first heard about the farmland that was about to come available through a meeting with the landowner's representative, not the realtor suing them. Ultimately both sides got up in court to tell their story, but the power company's executives account of how and when they first learned about the parcel of land was inconsistent.
The jury found the realtor's version of events more credible, awarding him his finder's fee.
Cases like this illustrate how important it is to keep your contracts -- and how good legal representation can sometimes resolve a contract dispute in favor of the underdog. An attorney can provide more information about contract litigation, including what your legal options are when a breach of contract occurs.
Source: The Real Deal, "Palm Beach jury: FPL must pay $1.5M after failing to pay real estate commission on handshake deal," July 12, 2017