An introduction is not a transaction

There is an African saying that when two people are shown the path to the farm, the harvest belongs not to the guide but to the one who tills, tends and brings the crop home. That old wisdom has found a modern echo in commercial law. A recent Nigerian Supreme Court decision, Philip Kayode Olusegun Ojo v. SDV Nigeria Limited & Anor., underscores a principle many business owners, landlords, developers and corporate occupiers would do well to internalise: an agent cannot claim commission merely for introducing a buyer or tenant; the agent must show that the introduction was the effective cause of the eventual transaction.

That is not a narrow property lesson. It is a boardroom lesson.

Too many Nigerian businesses still treat “I brought the deal” as if it were the same as “I earned the fee.” It is not. In broking, leasing, M&A origination, supplier sourcing, fundraising, executive recruitment and business development, the introduction is only the opening sentence. The legal and commercial question is whether the introducer was retained, what scope was agreed, what outputs were expected, and whether the introducer’s effort was the real foundation of the completed deal.

“If commission were automatically earned by first contact alone, businesses would face endless multiple-commission disputes and inflated transaction costs.”

Global broking practice often uses phrases such as “effective cause”, “efficient cause”, or “procuring cause” to capture this idea. In mature markets, procuring causes turns on whether the broker’s efforts set in motion an uninterrupted chain of events leading to the deal, not merely who first mentioned the opportunity.

This distinction matters because commerce is collaborative. A transaction may begin with one person’s introduction, be advanced by another person’s due diligence, structured by counsel, rescued by finance, negotiated by principals, and concluded months later by an entirely different team. If commission were automatically earned by first contact alone, businesses would face endless multiple-commission disputes and inflated transaction costs. That is one reason mature markets insist on clarity at the start. The principle is simple: ambiguity is expensive; documentation is cheaper.

For business owners, the strategic lesson is bigger than whether an estate surveyor wins a lawsuit. It is about how to govern all “finder”, “introducer”, and “advisor” relationships. If your company is buying property, raising capital, engaging distributors, appointing sales consultants, outsourcing procurement, or seeking anchor tenants, you should resist verbal understandings and sentimental assumptions. Instead, ask five hard questions before anyone starts work: Who engaged whom? For what precise mandate? At what fee? Payable upon what milestone? And under what exclusivity, if any? Those are not legal niceties. They are risk controls.

A sound introducer or agency agreement should therefore state, with precision, whether the role is only to identify prospects or to negotiate terms, coordinate diligence, attend meetings, prepare heads of terms, or shepherd the parties to completion. It should state whether the fee is a flat retainer, a success fee, or a hybrid. It should define the trigger for payment: introduction, signed offer, executed lease, completion, rent commencement, or actual receipt of funds. It should also address tail periods, non-circumvention, exclusivity and dispute resolution. Without these basics, businesses leave themselves exposed to claims from people who contributed something but cannot prove entitlement to what they now demand. The Supreme Court’s reasoning in the SDV matter is a reminder that the law does not automatically reward mere helpfulness; it rewards proven agency and proven causation.

There is another allied encounter where this principle should travel: internal business development teams. Many organisations pay “commission” informally to employees or external consultants who merely put a lead on the table. That approach invites politics, duplication and bitterness. Better practice is to define stages: lead generation, qualification, pitch participation, negotiation support, and close. Then assign incentives to each stage separately. In other words, pay for real value, not noise. The same thinking applies in private equity introductions, strategic partnerships, executive search and even government relations. A contact is not the same as a conversion.

None of this diminishes the role of professional agents. Quite the opposite. Serious agents should welcome this standard because it separates professionals from opportunists. A credible intermediary should be willing to sign a written mandate, document meetings, show continuity of involvement and demonstrate how their work materially advanced the transaction. That is what global best practice looks like. Courts in other common-law jurisdictions have likewise emphasised that an agent must be more than a historical footnote; the agent must be an effective cause of the completed deal.

For Nigerian business owners, the closing message is straightforward. Do not wait until success has arrived before deciding who deserves credit. By then, gratitude has usually given way to invoices. If someone is only an introducer, say so in writing. If someone is your exclusive agent, say so in writing. If compensation depends on completion, say so in writing. And if you want to avoid paying twice for the same transaction, document the chain of authority before the first site visit, first term sheet or first tenant inspection.

A wise enterprise does not confuse access with execution. In business, as in farming, the one who points to the land has done something useful. But usefulness is not always the same thing as entitlement.

Dr Olufemi Ogunlowo is the CEO of Strategic Outsourcing Limited, a leading provider of personnel and business process outsourcing services in Nigeria. He is also a regular columnist on employment and workforce strategy.