Referral agreement template
The contract skeleton most professionals look for before paying their first commission. Copy it, fill in the bracketed fields, have it reviewed. On Referaly this agreement is generated in each referrer's name and accepted online, with a time stamp.
Between the undersigned
[Company], [legal form] with a share capital of [amount], registered under number [registration number], with its registered office at [address], represented by [name], hereinafter the Principal.
And [referrer name], [status], residing at [address], hereinafter the Referrer.
Article 1. Purpose
The Referrer introduces the Principal to prospects likely to enter into a contract for [products or services]. The Referrer acts independently. They have no power of representation, no power to negotiate and no power to bind the Principal.
Article 2. The Referrer's role
The Referrer passes on the prospect's identity and contact details, along with anything useful to qualify the opportunity. A deal is deemed referred if the prospect was not already in contact with the Principal at the date of the introduction.
Article 3. Remuneration
The Principal pays the Referrer a commission of [rate] % calculated on [basis: net revenue, fees, margin]. The commission falls due when [trigger: contract signature, full payment received, end of the cooling off period]. It is paid within [number] days of that trigger, against an invoice.
Article 4. Term and pending deals
This agreement is entered into for [term], renewable by tacit agreement. Deals introduced before the end of the agreement continue to give rise to commission for [period] after it ends.
Article 5. Exclusivity
This agreement is non exclusive. The Referrer remains free to work with other companies, including competitors, unless otherwise agreed in writing.
Article 6. Confidentiality and personal data
Each party undertakes to keep confidential the information received from the other. The Referrer passes on a prospect's details only after obtaining their consent, and informs the prospect of the introduction.
Article 7. Independence
This agreement creates no relationship of subordination. The Referrer operates freely, with their own means, and is solely responsible for their tax and social obligations.
Article 8. Termination
Either party may terminate at any time, in writing, with [notice period] notice. Commissions due on deals already referred remain payable.
Article 9. Governing law
This agreement is governed by the law of [country]. In the event of a dispute, the parties shall seek an amicable solution before any legal action.
What this commission actually buys: tracking about 10,000 customers for almost three years, researchers measured that a referred customer is on average at least 16 % more valuable than a comparable customer acquired otherwise (Schmitt, Skiera and Van den Bulte, Journal of Marketing, 2011). And a reward does work: it increases the likelihood that a customer refers, especially toward weak ties (Ryu and Feick, Journal of Marketing, 2007).