Well that's a crappy situation, and one which your agent didn't handle well at all. There are lots of times where I'll work without a signed representation agreement, but usually those are deals that I know will close quick. If the deal starts to take too long for whatever reason, then I'll let the client know that I need to be protected. Generally speaking, we should always have a representation agreement in place before we start work, but there are times when kind agents who earn a lot of repeat and referral business will work without one. It's generally a sign that the agent is honest and hardworking; that's not to say that it's smart to work without one.
In this particular case, the agent spent lots of time and effort putting this deal together only to have your partner bail on the deal. That's very aggravating to agents. In his mind this deal was done and the money was already in his bank account. I can certainly understand that frustration, however I would not have handled it the way your agent did. I would have first contacted you for a lunch meeting and addressed the situation over lunch. I would have explained that I worked very hard without a contract because I had extreme faith that this deal was going to close. Etc, etc. You get the point. The agent shouldn't have just sent you a bill, although it's clear to me that he should be compensated somehow someway. Ask yourself this: did the agent do a good job of staying in touch with you? of explaining the terms? of negotiating the deal? of finding the space? of arranging tours? etc? If so, then I would suggest you throw him some kind of bone out of courtesy, but I wouldn't pay him the commission he would have received for a couple of reasons: 1) he didn't have a contract in place and he should have for the amount of time he put into it (teach him a lesson), 2) you don't know what the commission agreement would have paid him, and 3) he handled this whole billing scenario very poorly.
Hope that makes sense.
May 10, 2013