Referral Agreement Template | Awesome Sign

Referral Agreement Template

Referral marketing is a sort of cooperative venture in which a product or service provider pays a commission to a third party for each transaction made. In this scenario, the third-party is referred to as the referrer.

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What is the significance of a referral agreement?

Joint venture marketing is a tried-and-true method that has been around for what seems like an eternity. The difficulty is that most of these agreements are done behind closed doors or with handshake pledges.

The issue with these ad hoc arrangements is that commission payments might be missed, and there is no clear method in place to monitor leads effectively, which frequently leads to disputes.

A referral contract maintains everything in order and serves as a reference point to make all parties responsible to what they initially committed to. The agreement gives order and justice to the joint venture partnership, preventing potential escalation.

When should a referral fee agreement be used?

Depending on how heavily you rely on referral commissions as a development strategy, your agreement may become one of your most-used company agreements.

When a third party displays interest in your joint venture, you should use a referral partnership agreement. This might be done in person, remotely, or even through a fully automated internet affiliate scheme. In either of these scenarios, you'll need to present your contract to possible referrers in order to obtain their approval.

When using a referral commission agreement, follow these best practises.

1. Meet with new referral partners in person.

It is always preferable to deliver your recommendation agreements in person if at all feasible. It doesn't matter if this is done in person or online. Connecting with partners on a personal level is critical for building connections, explaining how your product/service works, and becoming familiar with your contract conditions.

So, visit with your possible partners and acquire their consent on everything in your agreement. This can help you manage expectations and reduce confusion in your business partnership moving ahead. Connecting with partners also maintains your business at the forefront of people's minds, which will help you generate more sales.

2. Be precise about the structure of your commissions.

Your commission rate is the most crucial aspect of your referral partner agreement. Your income share is totally determined by how you want to manage your business and how much you can afford to give up every transaction.

The more detailed your fee structure, however, the clearer your agreement. Sellers and referrers can both begin to estimate revenue based on a referral fee, which motivates all parties to increase sales.

Overly intricate commission systems frequently confuse partners and are consequently less motivating for them. As a result, keeping your fee structure simple with a flat charge or fixed percentage for each referral is beneficial.

3. Be open and honest

When you show your referral agreement to potential partners, explain why you constructed the contract the way you did.

For example, if you have a confidentiality provision in place regarding how marketing materials are utilised and stored, explain why this is necessary.

Be honest about how your company generates money and the importance that partners have in its long-term viability.

Transparency regarding your referral contract can help you create trust with partners and gain useful feedback on what works and what doesn't when it comes to suggesting your goods. This input may be used to enhance your product/service, commission structure, and so on.

Template Preview

Referral Agreement

This Referral Agreement (the "Agreement") is made on ______________________________________.(the "Effective Date") by and between _____________________________________., with an address of _____________________________________.(the "Company") and , with an address of _____________________________________.(the "Affiliate"), also referred to individually as "Party" and collectively as "the Parties."

Purpose. The Company is in the_________________________________. The company wishes to gain more clients/customers for___________________________.The Affiliate can refer potential clients/customers to the Company.

Arrangement for Referral Following the Effective Date of this Agreement, the Affiliate may recommend new clients/customers to the Company on an as-needed basis. The Company will compensate the Affiliate for these referrals.

Compensation. The Company will pay the Affiliate for each successful recommendation, defined as a reference who becomes a client/customer of the Company. The Company shall pay the Affiliate for each unsuccessful referral, defined as a valid referral candidate who does not become a client/customer of the Company due to no fault of the Affiliate or the Company; and a valid referral candidate is a potential client/customer who meets the specifications stated in Section 1 above. The Affiliate shall be paid by the Company within thirty (30) days of a completed referral, where a completed referral is the engagement of the new client/customer or conclusive action indicating the recommendation will not become a new client/customer.

Term. This Agreement will begin on the above-mentioned Effective Date and will last until______________.

Confidentiality. During the term of this Agreement, the Company may be required to disclose proprietary information with the Affiliate, such as trade secrets, industry expertise, and other private information, in order for the Affiliate to seek out possible referrals. At no point will the Affiliate divulge any of this confidential information. The Affiliate will also not utilise any of this private information for personal gain at any point. This clause will remain in full force and effect even if the Agreement is terminated naturally or prematurely by either Party.

Termination. This Agreement may be ended at any time by any party by providing the other party with______ days written notice. Upon termination, the Company shall pay the Affiliate any and all remuneration owed to the Affiliate for referrals made prior to the date of termination but not yet paid.

Warranties and representations Both Parties represent and warrant that they have complete authority to engage in this Agreement. The performance and duties of either Party will not violate or infringe on the rights of any third party, nor will they violate any other agreement between the Parties, individually, or any other person, organisation, or corporation, or any law or governmental regulation.

Indemnity. The Parties agree to indemnify and hold harmless the other Party, its respective affiliates, officers, agents, employees, and permitted successors and assigns, from any and all claims, losses, damages, liabilities, penalties, punitive damages, expenses, reasonable legal fees, and costs of any kind or amount resulting from the indemnifying Party's negligence or breach of this Agreement that occurs in c This clause will remain in full force and effect even if the Agreement is terminated naturally or prematurely by either Party.

Liability Restrictions NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR ANY DAMAGES RESULTING FROM ANY PART OF THIS AGREEMENT, INCLUDING, 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'

Warranties are thus disclaimed. As asked by the Company, the Affiliate will refer potential clients/customers. THE AFFILIATE MAKES NO REPRESENTATIONS OR WARRANTIES THAT SUCH REFERRALS WILL GENERATE ADDITIONAL PROFITS, SALES, EXPOSURE, BRAND RECOGNITION, OR THE LIKE. THE AFFILIATE HAS NO RESPONSIBILITY TO THE COMPANY IF THE REFERRALS DO NOT LEAD TO THE DESIRED RESULT FOR THE COMPANY (S).

Severability. If any term of this Agreement is found to be illegal or unenforceable, in whole or in part, that provision shall be severed from the remainder of the Agreement, while all other sections shall remain in full force and effect as valid and enforceable.

Waiver. The failure of any Party to exercise any right, power, or privilege under the provisions of this Agreement will not be considered as a waiver of any later or future exercise of that right, power, or privilege, or of any other right, power, or privilege.

Legal expenses. If a disagreement leads to legal action, the victorious party will be entitled to its legal expenses, including, but not limited to, its lawyers' fees.

Legal and binding contract. As mentioned above, this Agreement is valid and binding between the Parties. This Agreement is lawful and binding in both the United States and throughout Europe. Each of the Parties represents that they have the legal ability to engage into this Agreement.

Jurisdiction and governing law The Parties agree that this Agreement will be governed by the laws of the State and/or Country in which both Parties conduct business. If the Parties conduct business in separate states or countries, this Agreement will be governed by law.

Complete Agreement. The Parties recognise and agree that this Agreement constitutes their complete agreement. If the Parties wish to update, add, or otherwise modify any terms, they must do so in writing, which must be signed by both Parties.

Company Signed: _____________________________________. Name: _____________________________________. Date: _____________________________________.

Affiliate Signed: _____________________________________. Name: _____________________________________. Date: _____________________________________.