Referral Agreement: Templates & More

A referral agreement is a contract between two parties where one party agrees to refer potential customers or clients to the other party in exchange for a fee or other compensation. Referral agreements are commonly used in industries such as real estate, finance, and healthcare, where businesses rely on referrals to generate new leads and customers.

The main legal considerations and clauses that should be included in a referral agreement are:

1. Parties: The agreement should clearly identify the parties involved, including their names, addresses, and contact information.
2. Referral terms: The agreement should specify the terms and conditions of the referral arrangement, including the types of referrals covered, the fee or compensation structure, and the duration of the agreement.
3. Exclusivity: The agreement may include a clause that prohibits the referring party from working with other parties in the same industry or offering similar services.
4. Confidentiality: The agreement should include provisions to protect the confidentiality of any information exchanged between the parties, including client lists, business practices, and other proprietary information.
5. Representations and warranties: Both parties should provide representations and warranties regarding their respective businesses and their ability to perform their obligations under the agreement.
6. Termination: The agreement should specify the circumstances under which either party can terminate the agreement, including the notice period and any penalties or damages for breach.
7. Indemnification: The agreement should include provisions for indemnification, where one party agrees to compensate the other party for any losses, damages, or liabilities arising out of the referral arrangement.
8. Governing law and dispute resolution: The agreement should specify the governing law that will apply to the agreement and the procedures for resolving disputes between the parties, such as mediation or arbitration.