Ready-to-Use Client Referral Agreement Template
This client referral agreement template helps businesses set out the terms under which one party introduces potential customers to another. It covers referral eligibility, fees, payment timing, confidentiality, non-circumvention, records, and termination, helping both parties document their commercial expectations clearly.
A client referral agreement records the terms under which a referrer introduces prospective customers to a business. It is commonly used by consultants, agencies, brokers, service providers, and commercial partners that expect compensation when a qualified introduction results in a sale. A clear written agreement reduces disputes about who made the introduction, when a fee is earned, and how it will be calculated. This ready-to-use template provides a practical starting point that can be adapted to the transaction and the applicable law.
What Is a Client Referral Agreement?
A client referral agreement is a commercial contract between a business receiving introductions and a party that refers prospective clients. The referrer does not usually act as an employee, agent, or authorised representative of the receiving business unless the agreement expressly says otherwise.
The document should identify the services or products covered, define what counts as a valid referral, and establish the commercial consequences of a successful introduction. Its main purpose is to create an auditable framework for referral commissions.
Referral versus agency
A referral arrangement generally involves making an introduction only. An agency relationship may involve authority to negotiate, bind, or represent the business, which can create substantially different legal and regulatory consequences.
Key Terms to Include
The parties should use precise definitions for a referred client, a completed transaction, net revenue, and the referral period. Vague wording can lead to disagreements where the business already knew the prospect or where several people claim credit for the same lead.
| Document field | Purpose | Common error |
|---|---|---|
| Referred client | Identifies the prospect and required contact details | Failing to exclude existing clients or active leads |
| Referral fee | Sets the commission amount or calculation method | Not stating whether tax or refunds affect the fee |
| Qualification period | Limits how long an introduction can generate a fee | Using no start date or end date |
| Payment date | States when the earned commission is payable | Confusing invoicing with actual receipt of customer payment |
| Scope of authority | Confirms the referrer cannot bind the business | Allowing informal promises to clients |
How referral fees are calculated
The fee may be a fixed sum per successful client, a percentage of net revenue, or a tiered amount based on contract value. The agreement should state whether the fee becomes payable upon signature, invoice payment, service delivery, or expiry of a refund period.
Information and Documents to Gather
Before signing, each party should confirm its legal name, business address, registration details where relevant, and authorised signatory. The receiving business should also establish an internal process for acknowledging referrals and reporting completed sales.
- Full legal names and contact details of both parties.
- A description of the relevant products or services.
- The method for submitting and accepting a referral.
- The fee structure, currency, and tax treatment.
- The period during which a referral remains eligible.
Keeping written records of the referral submission and acceptance is especially important. Email confirmation, a shared customer relationship management system, or a signed referral notice can provide useful evidence.
Editable template
Document template
CLIENT REFERRAL AGREEMENT
This Client Referral Agreement (the “Agreement”) is made on ____________________, 20____, at ____________________.
Receiving Business: ____________________, a ____________________ organised under the laws of ____________________, with its principal address at ____________________ (“Business”).
Referrer: ____________________, a ____________________ organised under the laws of ____________________, with its principal address at ____________________ (“Referrer”).
The Business and the Referrer are collectively the “Parties” and individually a “Party”.
| Variable | Agreed details |
|---|---|
| Products or services covered | ____________________ |
| Referral fee | ____________________ |
| Fee calculation basis | ____________________ |
| Referral qualification period | ____________________ |
| Payment deadline | ____________________ |
| Governing law | ____________________ |
- Purpose. The Referrer may introduce prospective clients to the Business for the products or services identified in this Agreement.
- Referral Submission and Acceptance. The Referrer shall submit each proposed referral in writing, including the prospective client’s name and contact details. A referral qualifies only if the Business confirms its acceptance in writing and the prospective client is not an existing customer or active lead of the Business.
- Referral Fee. For each qualifying referral that results in a completed transaction, the Business shall pay the Referrer the referral fee stated above. The fee shall be due within ____________________ days after ____________________.
- Records and Verification. The Business shall maintain reasonable records of qualifying transactions. Upon reasonable written request, the Business shall provide information necessary to verify the calculation of a referral fee.
- Independent Parties. The Referrer is an independent contractor and has no authority to bind the Business, negotiate on its behalf, make warranties, or enter into contracts for the Business.
- Confidentiality. Each Party shall keep confidential all non-public business, client, commercial, and financial information received in connection with this Agreement, except where disclosure is required by law or authorised in writing.
- Data Protection. Each Party shall comply with applicable privacy and data protection laws when collecting, sharing, or using personal information relating to prospective clients.
- Term and Termination. This Agreement begins on ____________________ and continues until terminated by either Party upon ____________________ days’ written notice. Referral fees remain payable for accepted referrals that complete a qualifying transaction within ____________________ after termination.
- Governing Law and Disputes. This Agreement shall be governed by the laws of ____________________. The Parties shall first attempt in good faith to resolve any dispute through direct negotiation.
- Entire Agreement. This Agreement constitutes the entire agreement between the Parties concerning its subject matter. Any amendment must be in writing and signed by both Parties.
Signed by the Parties on the date first written above.
For the Business: ____________________
Name: ____________________
Title: ____________________
Date: ____________________
For the Referrer: ____________________
Name: ____________________
Title: ____________________
Date: ____________________
Edit the text right here. Changes are stored in your browser, and you can print them or export to Word and PDF.
Recommended Process for Managing Referrals
A consistent process allows the business to assess referrals fairly and gives the referrer visibility into whether an introduction has been accepted. It also helps prevent duplicate claims and protects confidential client information.
- The referrer submits the prospective client’s details and obtains any necessary consent.
- The receiving business confirms whether the prospect is new and accepts or rejects the referral.
- The receiving business records the referral and tracks any resulting transaction.
- The receiving business calculates and pays the fee according to the agreed terms.
Practical recommendation: require written acceptance of every referral before sharing detailed client information or beginning commercial discussions.
Commercial and Legal Safeguards
Confidentiality obligations should protect business information, client details, pricing, and transaction terms. Where personal data is exchanged, the parties should also consider privacy law, a lawful basis for sharing information, and the security measures needed for handling it.
A non-circumvention clause may prevent the receiving business from avoiding an agreed fee by contracting with a referred client through an affiliate or intermediary. However, such clauses should be carefully drafted, proportionate, and reviewed against the law governing the agreement.
Ending the Arrangement
The agreement should state whether either party may terminate on notice and what happens to referrals already accepted before termination. A common approach is to preserve commission rights for accepted referrals that lead to a qualifying transaction within a stated tail period.
It is also useful to specify governing law, dispute resolution, notices, and whether amendments must be in writing. These provisions make the agreement easier to administer if the commercial relationship changes.
Frequently Asked Questions
When is a referral fee earned?
The agreement determines this. It may be earned when the customer signs a contract, when the business receives payment, or when a defined service milestone is completed.
Can a business reject a referral?
Yes. The contract should allow rejection where the prospect is already a customer, an existing lead, unsuitable, or outside the agreed scope.
Does a referrer need authority to negotiate?
Usually not. A referral agreement normally limits the referrer to making introductions and expressly denies authority to make promises or enter contracts on behalf of the business.