Most Estate Agents agreements allow only to be payable once Contracts have been exchanged.
Sadly, there are some Agents Agreements that do include a provision that a part of their commission becomes payable if they have introduced a "ready, willing and able" buyer, and the Seller then decides to withdraw, and if so, their fee is payable. Agreements should therefore always be read before signing.
However, in your case, I feel you have a strong case to argue no "ready, able and willing" buyer had been found. I say that, on the basis that I assume no Contracts had been issued, and no mortgage had been obtained by the buyer. If so, in no circumstances can you say that a party who has merely made an offer to buy a property is a "ready, willing and able" buyer. Indeed, if they never sent you confirmation of the offer made by the buyer, and hence you had no way of "accepting" their offer, it is clear matters were merely at the negotiation stage.
Newton Fallowell are members of the Professional Guild of Estate Agents, and as such, need to comply with the body's terms, an extract of which I set out below-
3 Terms of Business, Instructions, Commission and Termination
By law you must give your client written confirmation of his (see 12 below) instructions to act in the buying or selling of properties on his behalf. In so doing you must give the client written details of your fees and expenses and of your business terms. You should give the client these details before he is committed or has any liability towards you. If appropriate, you must notify your client in writing if you or an 'associate' (see 9b below) or 'connected person' (see 12d below) wish to offer estate agency, surveying, investment, insurance or other services to people proposing to buy your client's property through you.
Except previously agreed expenses and fees, fees will only become due if a purchaser enters into a contract (in Scotland, concludes missives) through you, to buy the property, or as stated otherwise in your terms of business. If you use the phrase 'sole selling rights', 'sole agency' or 'ready, willing and able purchaser' within the terms of engagement, you must explain these phrases in writing, as set out in The Estate Agents (Provision of Information) Regulations 199
You need to use these definitions in full otherwise this would be deemed to be misleading because of the other provisions in the contract. If this is the case, you should amend the definition to give an accurate description of the client's liability to pay. If you use any different term, which has the same meaning, you should still use the relevant definitions to explain your term.
I refer you to paragraph 2 above, as I feel they have also possibly contravened these terms.
I therefore suggest that you phone the Guild tomorrow and explain your issue. They will be able to assist. Telephone-(###) ###-####4141 or email- firstname.lastname@example.org.
If you have no joy with them, N Fallowell are also members of The Property Ombudsman which is an impartial redress system . www.tpos.co.uk
Before you can approach the Ombudsman, you first have to write a formal letter of complaint to N Fallowell.
I hope this helps you and sets out the legal position.