Finder's Fee Agreements in California: Licensing, the Writing Requirement, and Getting Paid

Last updated: November 2026. Reviewed by Pavel Kolmogorov, California business litigation attorney (State Bar No. 321018).

A finder's fee agreement is a promise to pay for introducing the parties to a deal. California enforces it like any other contract, oral or written, but suit on a handshake deal must usually be filed within two years. (Code Civ. Proc., § 339, subd. 1.) An agreement to find a buyer or seller of real estate must be in writing. (Civ. Code, § 1624, subd. (a)(4).) A finder who negotiates the deal may also need a license. Kolmogorov Law, P.C. litigates these disputes in Orange County and Los Angeles.

Call (909) 235-6116 or contact us online to discuss an unpaid finder's fee or a fee demand your company disputes.

Finder versus broker: why the line matters

A finder brings two parties together and steps back. A broker stays in the deal and helps make it. The difference decides whether an unlicensed person can sue for the fee.

California's real estate licensing law reaches further than its name suggests. A broker includes anyone who, for compensation, solicits buyers or sellers of, or negotiates the purchase or sale of, real property or a business opportunity. (Bus. & Prof. Code, § 10131, subd. (a).) A business opportunity includes the sale or lease of an existing business and its goodwill. (Bus. & Prof. Code, § 10030.) A person acting as a broker cannot sue for compensation without proving a license at the time the claim arose. (Bus. & Prof. Code, § 10136.)

The California Supreme Court has long recognized an exception for the true finder. One who simply finds and introduces the parties to a transaction need not be licensed as a real estate broker. The finder's job is limited to bringing the parties together so they can negotiate their own contract, and the line is usually crossed by taking part in the negotiations. (Tyrone v. Kelley (1973) 9 Cal.3d 1, 8-9.)

So the first question is what the claimant did after the introduction. Passing along a contact is finding. Carrying offers back and forth or working out terms starts to look like brokering.

When a finder's fee agreement must be in writing

Most finder agreements need no writing. A handshake promise to pay for introducing a supplier, a customer, or a lender is an oral contract, and the difficulty is proof. Our page on breach of an oral contract covers how those are proved.

Real estate is the exception. An agreement employing an agent, broker, or any other person to procure, introduce, or find a purchaser or seller of real estate for compensation is invalid unless it is in writing and signed by the party to be charged. The same rule covers finding a tenant or landlord for a lease longer than one year. (Civ. Code, § 1624, subd. (a)(4).) The words "any other person" bring finders within it. Other writing requirements are collected on our statute of frauds page, and licensed brokers' claims are covered on our page about real estate commission disputes.

Introducing investors is a special case

The handshake deal I am asked about most involves money: someone introduces an investor to a private company and expects a percentage when the round closes. Being paid to help sell securities is regulated, and California exempts only a narrow class of finders from its broker-dealer certificate requirement. Among other conditions, the finder may introduce only accredited investors, may not negotiate terms or give advice, must file a statement with the state, and must obtain a written agreement signed by the finder, the company, and the investor. (Corp. Code, § 25206.1.) A finder outside the exemption should expect the company to raise that as a defense, and how far it goes depends on the facts. We litigate these fee disputes. We do not handle securities offerings.

Proving the introduction earned the fee

Assume the agreement is enforceable. The finder still has to show the fee was earned under its terms.

The usual disputes are these. Did the company already know the investor or buyer? Was the fee owed on introduction, on signing, or only on closing? Did the deal that closed match the deal the fee was promised for, or was it smaller, later, or structured differently? Was there a time limit, often called a tail, after which closings no longer count?

Emails are the best evidence: the message making the introduction, the reply thanking you for it, and anything stating the percentage. Where a fee was promised but no amount was fixed, a claim for the reasonable value of the service may be available, as our page on quantum meruit explains.

Deadlines are short for handshake deals. An action on a contract not founded on a writing must be filed within two years. (Code Civ. Proc., § 339, subd. 1.) A written agreement gets four. (Code Civ. Proc., § 337, subd. (a).)

Non-circumvention clauses

A non-circumvention clause bars a party from going around the finder to deal directly with the contacts the finder introduced. It is the finder's main protection, and courts generally treat a clause that protects the fee as an ordinary contract term. A clause that goes further and bars a business from dealing with the introduced contacts may be tested for reasonableness as a restraint on trade. (Bus. & Prof. Code, § 16600, subd. (a); Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130.)

Clauses that fare best identify the protected contacts, usually by a written list or by email introductions, and run for a stated period. The ones most at risk claim every contact in an industry, forever. The remedy for breach is normally the fee the finder would have earned, so the clause should say how that fee is calculated.

If your business received a finder's fee demand

Work through the defenses in order.

Was there an agreement at all, or did the claimant volunteer an introduction and later attach a price?
If the deal involved real estate, is there a signed writing?
Did the claimant negotiate, which may require a license the claimant lacks?
Did the company already have the relationship?
Did the transaction that closed fall within the terms and the time limit of the promise?

Many of these disputes settle once both sides see the documents. Those that do not are filed in superior court, at the Central Justice Center in Santa Ana or the Stanley Mosk Courthouse in Los Angeles.

What to bring to the first meeting

Any written agreement, term sheet, or email stating the fee.
The messages making the introduction and the responses to them.
A timeline of every contact with each side after the introduction.
Closing documents or public announcements showing the deal that was done.

Frequently asked questions

I introduced an investor to a company under a handshake finder's fee deal and they closed without paying me. Can I sue in California?

Possibly. An oral finder's fee agreement outside real estate can be enforced in California if you prove the promise and your introduction, and you generally have two years to sue. Because the deal involved an investment, the company may argue that securities rules required registration or a written, signed finder agreement. Have that issue reviewed before sending a demand.

Does a finder's fee agreement have to be in writing in California?

Only in some cases. California's statute of frauds requires a signed writing for an agreement to procure, introduce, or find a buyer or seller of real estate, or a party to a lease longer than one year, for compensation. Finder agreements for other kinds of deals can be oral, though proving an oral promise is harder.

Is a non-circumvention agreement enforceable?

Often yes, as a contract term that protects the finder's fee. The practical questions in California are whether the clause identifies the contacts it protects, how long it lasts, and whether the party actually went around the finder to close with a protected contact. A clause that bars a business from dealing with those contacts at all may also be tested for reasonableness as a restraint on trade. Damages are usually measured by the fee that was avoided.

Do I need a license to collect a finder's fee?

Usually not, if you only introduced the parties. California recognizes a finder's exception to the real estate licensing law for a person whose role is limited to bringing the parties together. A person who goes further and negotiates the sale of real property or a business may be treated as a broker, who cannot sue for compensation without a license. Introducing investors falls under separate securities rules with their own conditions.

Someone I barely know says we owe him a percentage of our company's sale because he mentioned the buyer's name once. Do we have to pay?

Not unless there was an agreement to pay him. In California a finder must prove a contract, express or implied from conduct, and that the introduction led to the deal. A casual mention with no promise of payment is usually not enough.

Talk to a California breach of contract attorney

If you were cut out of a deal you introduced, or your company is facing a fee demand it does not owe, call (909) 235-6116 or contact us online. Kolmogorov Law, P.C. is located at 327 Magnet, Irvine, CA 92618, and represents businesses and individuals in Orange County, Los Angeles, and throughout California.

This page provides general information about California law and is not legal advice. Outcomes depend on the agreement, the claimant's role in the deal, and the court.