Commercial Referral Fee Agreement
This Commercial Referral Fee Agreement, drafted from the seller’s perspective, contemplates the referral of sales leads for general commercial transactions. Sometimes, a seller of goods or a service provider (seller) bolsters its formal sales network by implementing a formal or informal referral program. Through this referral program, the seller can pay a referral fee, also called a finder’s fee, to anybody (a finder) who is not a formal sales representative and makes an introduction or discovers an opportunity that results in a sale. Additionally, this referral program can leverage the seller’s extended network, including its employees.
A referral fee rewards somebody who initiates a relationship that leads to a sale, but who typically does not actually participate in the sales contract negotiations. For example, unlike a sales representative, a finder does not:
- Contact sales leads generated by the seller.
- Actively engage in the sales process, including making sales presentations.
- Solicit customer orders for seller approval.
- Act as liaison between the seller and the customer to further:
- the sales process;
- resolution of collection matters; and
- resolution of disputes.
This Commercial Referral Fee Agreement assumes that:
- The parties to the agreement are US entities and the transaction takes place in the US. Parties may need to modify these terms to comply with local laws. Thus, parties should consider modifying these terms if organized or operating in a foreign jurisdiction. Additionally, parties should consider modifying these terms if their transactions take place in a foreign jurisdiction.
- The agreement contemplates the payment of cash compensation only. The payment of any finder’s fee in the form of non-cash compensation, such as stock compensation, options, and warrants, is beyond the scope of this Agreement.
- These terms are not industry-specific. This Agreement does not account for any industry-specific laws, rules, or regulations that may apply to certain transactions, products, or services. For example, referral agreements in:
- the accounting industry may be proscribed or greatly restricted; and
- the securities industry may raise the issue of whether the finder must register as a “broker” or “dealer” within the meaning of the Securities Exchange Act of 1934.
- The finder is an independent contractor. This Agreement contemplates that the finder is an independent contractor, rather than an employee of the seller. Moreover, engaging an employee to provide referral services may entail legal and regulatory issues that are beyond the scope of this Agreement.
Helix Compliance, LLC (“Helix”) is not a law firm, and Helix’s employees and representatives are not acting as your attorney. Helix provides a technology-based platform for those seeking to prepare their own legal documents. Using Helix’s system-generated documents does not create an attorney-client relationship between you and Helix or any Helix employee or representative. Therefore, your communications with Helix do not constitute privileged communications. Likewise, neither the attorney-client privilege nor the work product doctrine protect your communications with Helix. Helix is not your lawyer in any way, shape, or form.
Using Helix’s documents is not a substitute for the expertise of an attorney. Thus, you should not use Helix’s system-generated documents as a substitute for legal advice. Additionally, you should not construe Helix’s system-generated documents as legal advice. Helix does not review any information provided to it for legal accuracy or sufficiency. Helix does not apply the law to the facts of your situation, and Helix does not draw legal conclusions. Further, Helix does not provide opinions about your selection of documents. Users seeking legal advice should consult a qualified licensed attorney.
Even though Helix seeks to ensure that document content is up-to-date, laws change rapidly. Therefore, Helix does not guarantee that each document is completely current. The law differs in each legal jurisdiction and may be applied differently depending on your factual circumstances. If you are unsure whether your situation requires a specific document or whether the document’s contents are legally sufficient for your specific purposes, you should consult a qualified licensed attorney.
This material is for informational purposes only. Helix is not responsible for any loss, injury, claim, liability, or damage related to your use of Helix documents. Your use of this material and Helix documents is at your own risk.
Comments from the Author
Commercial Referral Fee Agreement