Dan, my thoughts are that this is bonkers at so many points it's hard to know where to start...
>Basically at breeding time we had agreed that he wanted to keep a puppy for himself and he wanted first refusal also pretty standard during breeding I think ??
It's not pretty standard, it's a request the stud owner can make - but you don't have to agree. I strongly strongly recommend - for the purpose of avoiding this and many other complicated situations - that you never agree to this again. I never would. You are the breeder. You decide where pups are placed. Not him.
>the puppies were born yesterday and straight away hes on my case saying which puppy he wants and that hes going to take it at 8 weeks then sell it himself for the same amount as I would sell if for.
As someone else has already mentioned, he is then acting as a third party. It is about to be illegal in the UK for 3rd parties to sell puppies. Puppies must be sold by the breeder and viewed with the mother. Even if it's not totally illegal yet, you are clearly not working to best practice if you allow this to happen when it's about to be banned next year:
https://www.bbc.co.uk/news/uk-48249333 >To this I've said at this stage since the pup isn't being kept I'd rather not do this and would sell the pup myself as is always breeders responsibility anyway and he can have the 500 from one pup.
Totally right.
>But hes saying I've gone back on the agreement ... which was that he picks and keeps one .
Unless the agreement is in writing, he doesn't have a leg to stand on. And even if it were in writing, if you also had in writing his decision NOT to keep a pup during pregnancy, that would supercede whatever previous arrangement you'd made.
>The reason I'm not happy with pick of the litter in the case that it's to be sold anyway is that I wont be able to see how the new owner gets on with the pup and that they are a match if that makes sense and with all the [dogs] already ending up in shelters I really want to see how each and every pup interacts with the potential owners so I can be as sure as possible that it will be there forever home
You are totally right and sound like a responsible breeder to me.
I think you should tell him you will either BACs him £500 or deliver him £500 cash if he prefers, but that the option of having a pup - whether for himself or to sell - is totally off the table. If he wants to discuss it further, tell him he can discuss it with your lawyer. And whatever he says back to you, just keep repeating that - he can discuss it with your lawyer. And if you want a bit more support, give Trevor Cooper at Dog Law a call - it will cost about £50 for a phone consultation but they will be able to tell you exactly where you stand legally so you know exactly what to say to him:
https://www.doglaw.co.uk