"Referral Agreement Template"

What Is a Referral Agreement?

A Referral Agreement is a formal contract used by individuals and entities to refer prospective channels or clients to the other party, in exchange for compensation for the referral.

Alternate Name:

  • Referral Fee Agreement.

A referral works as a recommendation, or an act of providing information about a certain person, company, or goods. It is applicable across a wide variety of industries and allows to increase profits by entering into new Sales Contracts. Use this document if you:

  1. Are seeking referral leads or clients from another party and wish to pay for those referrals with a fee.
  2. Wish to refer clients for a certain fee.

You may compose your own personalized contract using our online form builder or download a non-fillable Referral Agreement template through the link below.

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Essential Referral Agreement Clauses

A simple Referral Fee Agreement is used when people (referrers) have contacts and knowledge in a certain area and wish to be paid for making successful introductions (referrals) to other individuals or companies (referees). Often, a referrer will introduce a seller and purchaser of goods or services, real estate seller and buyer, or employer and future employee. Basically, referral fees are about rewarding experienced people for bringing in a customer - on an ongoing basis or as a one-time thing.

Make sure that your Referral Agreement contains the following clauses:

  1. The names and addresses of the referee (recipient) and the referrer.
  2. Purpose of the contract. Identify the business of the parties and their intentions. Set out in full detail how you want the referral to occur.
  3. Compensation. State an amount of money the referrer is paid for each successful referral (for example, when a new client becomes a customer of the recipient). You may choose a percentage commission on the referrals or a specified sum of money. Increasing amounts based on the number of referrals made can be a great incentive to motivate a referrer.
  4. Duration of the contract - it may be a short-term arrangement or a long-term contract.
  5. Confidentiality and privacy. If the parties share trade secrets or industry knowledge, spell out their obligation to keep the information confidential.
  6. Exclusivity. If you add this clause, it will prevent your referral partner from seeking similar arrangements with other companies or individuals. It is a tricky provision since it may restrict future business opportunities for some entities; however, some companies may benefit from entering into exclusive referral arrangements, so negotiate this clause with another party.
  7. Additional terms and conditions. The parties may add a special termination clause, mention warranties or guarantees, and put their liability in writing.
  8. Signatures of both parties. These indicate that the parties are to be legally bound by the provisions stated in the contract.

How Long Does a Referral Agreement Remain in Effect?

The agreement is considered ineffective on the termination date specified by the parties. Some agreements will have clauses regarding renewal terms and are automatically extended unless either of the parties sends out a notice of non-renewal. Either way, these specifics vary and are decided on by the participating parties.

A properly drafted Referral Contract will help you formalize a mutually beneficial business relationship with other individuals and companies. It encourages people to spread the message about the business. Once you establish referral fees, the referrer will generate clients, and thanks to the referrer's connections and expertise, you may discover new business opportunities you did not have access to before.


Want to find out more? Check out these related contracts and forms:

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Referral Agreement
This ​ R eferral Agreement (hereinafter referred to as the ​ “ Agreement”​ ) is entered into
as of ___________________ by and between ________________________________,
with a mailing address of ________________________________________________
_____________________________________________________________________
(hereinafter referred to as the “Company”) and _______________________________,
with a mailing address of ________________________________________________
_____________________________________________________________________
(hereinafter referred to as the “Affiliate”), collectively referred to as the “Parties”,
both of whom agree to be bound by this Contract.
1. Purpose. The Company is in the business of ______________________________.
The Company is looking to gain additional clients and the Affiliate is in a position to
refer these potential clients to the Company.
2. Referral Arrangement. Upon the execution of this Agreement, the Affiliate may,
from time to time, refer potential clients to the Company. The Company will pay the
Affiliate a fee for these referrals.
3. Compensation. ​ T he ​ C ompany shall pay the Affiliate $_____________ for each
successful referral. A successful referral is described as such:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
The ​ C ompany shall pay the Affiliate $_____________
f or each unsuccessful referral.
An unsuccessful referral is described as such:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
The Affiliate will receive compensation within thirty _____ days of a completed
referral. A completed referral is described as such:
Referral Agreement
This ​ R eferral Agreement (hereinafter referred to as the ​ “ Agreement”​ ) is entered into
as of ___________________ by and between ________________________________,
with a mailing address of ________________________________________________
_____________________________________________________________________
(hereinafter referred to as the “Company”) and _______________________________,
with a mailing address of ________________________________________________
_____________________________________________________________________
(hereinafter referred to as the “Affiliate”), collectively referred to as the “Parties”,
both of whom agree to be bound by this Contract.
1. Purpose. The Company is in the business of ______________________________.
The Company is looking to gain additional clients and the Affiliate is in a position to
refer these potential clients to the Company.
2. Referral Arrangement. Upon the execution of this Agreement, the Affiliate may,
from time to time, refer potential clients to the Company. The Company will pay the
Affiliate a fee for these referrals.
3. Compensation. ​ T he ​ C ompany shall pay the Affiliate $_____________ for each
successful referral. A successful referral is described as such:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
The ​ C ompany shall pay the Affiliate $_____________
f or each unsuccessful referral.
An unsuccessful referral is described as such:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
The Affiliate will receive compensation within thirty _____ days of a completed
referral. A completed referral is described as such:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
4. Term. This Agreement shall commence upon ___________________________, as
stated above, and will continue until ___________________________.
5. Confidentiality. During the course of this Agreement, it may be necessary for the
Company to share proprietary information, including trade secrets, industry
knowledge, and other confidential information, to the Affiliate in order for the
Affiliate to seek out potential referrals. The Affiliate will not share any of this
proprietary information at any time. The Affiliate also will not use any of this
proprietary information for their personal benefit at any time. This section remains in
full force and effect even after termination of the Agreement by it’s natural
termination or the early termination by either party.
6. Termination. ​ T his Agreement may be terminated at any time by either Party upon
_____ days written notice to the other party. Upon termination, the Company shall
pay to the Affiliate all compensation due and owing for referrals made prior to the
date of termination that was not yet paid.
7. Representations and Warranties. ​ B oth Parties represent that they are fully
authorized to enter into this Agreement. The performance and obligations of either
Party will not violate or infringe upon the rights of any third-party or violate any other
agreement between the Parties, individually, and any other person, organization, or
business or any law or governmental regulation.
8. Indemnity. The Parties each agree to indemnify and hold harmless the other Party,
its respective affiliates, officers, agents, employees, and permitted successors and
assigns against any and all claims, losses, damages, liabilities, penalties, punitive
damages, expenses, reasonable legal fees and costs of any kind or amount whatsoever,
which result from the negligence of or breach of this Agreement by the indemnifying
party, its respective successors and assigns that occurs in connection with this
Agreement. This section remains in full force and effect even after termination of the
Agreement by its natural termination or the early termination by either party.
9. Limitation of Liability. ​ U nder no circumstances shall either Party be liable to the
other Party or any Third Party for any damages resulting from any part of this
agreement such as, but not limited to, loss of revenue or anticipated profit or lost
business, costs of delay or failure of delivery, which are not related to or the direct
result of a Party’s negligence or breach.
10. Disclaimer of Warranties. Affiliate shall refer potential clients/customers as
requested by Company. Affiliate does not represent or warrant that such referrals will
create any additional profits, sales, exposure, brand recognition, or the like. Affiliate
has no responsibility to company if the referrals do not lead to company’s desired
result(s).
11. Severability. In the event that any provision of this Agreement is deemed invalid
or unenforceable, in whole or in part, that part shall be severed from the remainder of
the Agreement and all other provisions should continue in full force and effect as valid
and enforceable.
12. Waiver. The failure by either of the Parties to exercise any right, power or
privilege under the terms of this Agreement will not be construed as a waiver of any
subsequent or further exercise of that right, power or privilege or the exercise of any
other right, power or privilege.
13. Legal Fees. ​ I n the event of a dispute resulting in legal action, the successful party
will be entitled to its legal fees, including, but not limited to its attorneys’ fees,
collection fees and the like.
14. Legal and Binding Agreement. This Agreement is legal and binding between the
Parties as stated above. The Parties each represent that they have the authority to enter
into this Agreement.
15. Governing Law and Jurisdiction. ​ T he Parties agree that this Agreement shall be
governed by ____________________ law​
.
(State)
16. Entire Agreement. The Parties acknowledge and agree that this Agreement
represents the entire agreement between the Parties. In the event that the Parties desire
to change, add, or otherwise modify any terms, they shall do so in writing to be signed
by both parties.
The Parties agree to the terms and conditions set forth above as demonstrated by their
signatures as follows:
COMPANY
AFFILIATE
Name: ​ _ ________________________
Name: ​ _ ________________________
Signed: ​ _ _______________________
Signed: ​ _ _______________________
Date: __________________________
Date: __________________________
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