Referral Fee Contract Template

Referral Fee Agreement

TR.COM.02
This Referral Fee Agreement is for use where one party (a supplier of a goods or services) (the "Client") wishes to engage another as a referrer of suppliers or customers in order to generate more sales and increase their customer base. The referrer will earn a fee in return for his efforts.

A referrer differs from an agent as a referrer does not do any selling of the other party’s products or services themselves, but rather will refer a potential customer on, either through simply informing him of the goods or services provided by the Client, or by actively passing contact details and so forth on to the Client. Once the referral is made, the referrer steps back and will have no further role in the relationship between the Client and the customer. The selling and supply remains the sole remit of the Client.

If you require an agreement which creates a principal – agent relationship, you should use one of the agency agreements also available from Simply-Docs.

This template is designed for use where the Client does not have in mind any one particular customer to target, but rather is simply seeking to obtain new customers and widen its client base, sell into a new market, or even source cheaper suppliers for itself. It is particularly suited to situations where there are to be shop-to-shop referrals. If you require an agreement which is designed for the situation where the supplier is targeting a specific customer or type of customer, you should use one of the Introducer Agreements.

This document can be set up so as to operate on a fixed fee or percentage basis, with payment upon the introduction itself, upon the first transaction, or both. The inclusion of a Fee Structure at Schedule 1 also permits more detailed or complex fee arrangements to be incorporated. This differs from the Commission Agreement, which provides for a payment of commission on all transactions between the Client and an introduced customer over a specified period.

The “Fees and Payment” clause can be structured so that should the introducer fail to introduce any new business he will earn no fee. As such this can be viewed as a no win – no fee type arrangement.

This agreement has not been created in accordance with FSA rules or the Financial Services and Markets Act 2000, and as such makes no reference or commitment to abiding by them. This agreement therefore is unsuitable for the introduction of clients for financial services, such as insurance products or investment advice.

Please note that this document is not suitable for use by those providing or procuring legal services. In particular, customers should be aware of the prohibition on referral fees pertaining to personal injury cases in effect as of 1st April 2013.

This Referral Fee Agreement contains the following clauses:

1. Definitions and Interpretation
2. Appointment of Introducer
3. Introduction of Prospective Clients
4. Obligations of the Company
5. Fees and Payment
6. Relationship of the Parties
7. Non Competition
8. Confidentiality
9. Non Circumvention
10. Termination
11. Nature of Agreement
12. Notices & Service
13. Set Off
14. Jurisdiction

And Schedules:

Schedule 1: Fee Structure
Schedule 2: Product Schedule

Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the agreement.

This document is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.

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