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Referral Fee Agreement Template

Image 1

Prepared for:

​[Principal.FirstName][Principal.LastName]​

Prepared by:

​[Broker.FirstName][Broker.LastName]​

REFERRAL FEE AGREEMENT

This Referral Fee Agreement (the “Agreement”) is made and executed as of this (Day) day of (Month), (Year) (the “Effective Date”) by and among/between:

Principal(s):[Principal.LastName], [Principal.FirstName], (Age), of legal age, currently residing at [Principal.StreetAddress], [Principal.City], [Principal.State], [Principal.PostalCode], [Principal.Country] (collectively the “Principal”); and

Broker(s):[Broker.LastName], [Broker.FirstName], (Age), of legal age, currently residing at [Broker.StreetAddress], [Broker.City], [Broker.State], [Broker.PostalCode], [Broker.Country] (collectively the “Broker”); (each, a “Party” and collectively, the “Parties”)

RECITALS

  1. The Principal is the party who is competent and employs the Broker under this Agreement.

  2. The Broker is the party who is employed as an independent contractor under the Principal’s account who works in and between consumers and the Principal with loyalties to each, under this Agreement.

Principal and Broker are each referred herein as a "Party" and, collectively, as the "Parties."

WHEREAS, in consideration of the above recitals, the representations, warranties, covenants, and agreement stated in this Agreement and in good faith and valuable considerations, both Parties acknowledge the receipt and accuracy of the terms as agreed.

TERM

The Agreement shall commence on the (Day) day of (Month), (Year) until (Day) day of (Month), (Year) as agreed by both Parties.

Upon the end date of this Agreement,(Day) day of (Month), (Year), this Agreement will not be automatically renewed. Both Parties shall be notified via a reminder email ten (10) business days prior to the termination date. At this point, the Parties can renegotiate a new Agreement that includes additional clauses should there be any intention to do so.

TERMINATION

This Agreement will remain in effect within the agreed period by both Parties unless terminated earlier for valid or just cause by the Principal.

Termination or resignation from this Agreement shall be possible at any given time by providing a written notice thirty (30) calendar days prior to the intended last reporting date.

RELATIONSHIP BETWEEN PARTIES

  1. The Broker is the party employed as an independent contractor under the Principal’s account who works in and between consumers and the Principal with loyalties to each, under this Agreement. He/she will act as the liaison to mediate business between the Principal and the Client(s).

  2. The Broker shall be the point of contact for the Client(s) should there be any necessary coordination directly with the Principal about the products or services provided to the Client(s). 

  3. The Broker shall provide the Client(s) with all necessary reports and paraphernalia concerning products and services offered by the company of the Principal.

PAYMENT AND FEES

In consideration of the Broker’s leads and services, the Principal shall compensate the Broker the (insert the number of referral fee, e.g., 10)% worth of commissions of the total value of sales for the period of (insert number of months, e.g., three) months from the date of the first successful sales made by the Broker.

The Principal also agrees to pay the Broker his/her referral fee every (insert payment frequency, e.g., month, quarter, etc.) the amount of (amount) in (currency) (insert payment frequency, e.g., monthly, quarterly, etc.) equivalent and should not exceed the amount of (amount) in (currency) annually.

Payment and fees for all the leads and services rendered by the Broker should be payable via (insert payment type, e.g., check, direct deposit, etc.) under the Broker’s preferred account.

WHEREAS, this Agreement should be signed in counterpart.

NOW, THEREFORE, the Parties who entered this Agreement, the Principal and the Broker(s), acknowledge their part of this Agreement and thereafter affix their signature.

Signature:

​

Signature
MM / DD / YYYY

​

Signature
MM / DD / YYYY

​[Principal.FirstName][Principal.LastName][Principal.Company]​

​[Broker.FirstName][Broker.LastName][Broker.Company]​

ACKNOWLEDGMENT

State/Republic of (Insert Name)

County/City of (Insert Name)

I, [NotaryPublic.FirstName][NotaryPublic.LastName], Notary Public, do hereby certify that (name of individual(s) whose acknowledgment is being taken) personally appeared before me this day and acknowledged the due execution of the foregoing instrument. Witness my hand and official seal this (Day) day of (Month), 20(Year).

​

Signature
MM / DD / YYYY

​[NotaryPublic.FirstName][NotaryPublic.LastName][NotaryPublic.Company]​

Notary Republic

Notary Public

Doc. No. (Number);

Page No. (Number);

Book No. (Number);

Series of (Number);

Referral Fee Agreement

Used 4,947 times

An official contract outlining the terms of referral fees paid when one party recommends leads to another is known as a referral fee agreement.

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FAQ

  • A referral fee agreement is a legally binding contract between two parties, where one party agrees to provide leads to the other for a commission fee. For example, a broker will be paid a certain percentage from the share of sales or profit the seller or company made from the clients the broker introduced to them. 

  • Writing a referral fee agreement should be detailed and include: 

    • The name of the parties 

    • How long the agreement lasts

    • The payment terms, including how frequently and what percentage will be paid

    • When the agreement will end

    PandaDoc’s referral fee agreement template includes all these provisions, plus space for you to modify it to your needs.

  • You should use a referral fee agreement if you want to pay someone to refer business leads and customers your way without that person being a member of your organization. Having someone with a vast network connection is beneficial for you to acquire clients or new business leads without having to do the work to source them.

  • A referral fee agreement is important because it protects both parties should any claims and financial disputes arise from the fee arrangement. Having written documentation of what has been agreed to by both parties establishes the preliminaries prior to its commencement and captures any amendments or minor changes agreed to by the parties.

  • A reseller is a party where an individual or a business purchases goods and services with the intention of selling them to the target market and not for personal consumption. They earn profits and revenue through the reselling of the products or services.

    A referral is a party that serves as an intermediary or the middleman of a certain product or service they offer to the clients on behalf of the company. They earn commission percentages per product and services sold from their service.

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