Referral Agreement Template and How to Draft One (2026)

What is a referral agreement, and when do you need one? A referral agreement is a contract between a business and a referrer, where the referrer introduces potential customers and earns a fee when those introductions turn into business. It is common between agencies and partners, software vendors and consultants, and any two businesses that can send each other work. The agreement sets out what counts as a qualifying referral, how much the referral fee is, and when it is paid. You need a referral agreement whenever money will change hands for introductions. A clear agreement prevents the two most common disputes: arguments over whether a particular customer was really the referrer's introduction, and arguments over whether a fee is owed when a deal is small, delayed, cancelled or renewed. It also keeps the relationship honest about what the referrer can and cannot say about your business. This article is general guidance, not legal advice. Referral arrangements can engage tax, competition, data-protection and sector-specific rules, which vary by jurisdiction, so have a qualified professional review one before you rely on it. ## Referral agreement template Copy the block below and fill the bracketed fields. ```

REFERRAL AGREEMENT This Referral Agreement ("Agreement") is made on [DATE] BETWEEN: [COMPANY NAME], [address] ("Company") AND [REFERRER NAME], [address] ("Referrer") 1. PURPOSE The Referrer will introduce potential customers ("Referrals") to the Company. This Agreement sets out how Referrals are made and how the Referrer is paid. 2. QUALIFYING REFERRAL A Referral qualifies for a fee only if: (a) the Referrer submits the prospect's details in writing before any contact; (b) the Company accepts the Referral in writing; (c) the prospect was not already in the Company's pipeline; and (d) the prospect becomes a paying customer within [N] months of the introduction. 3. REFERRAL FEE The Company will pay the Referrer: [Option A - percentage: [X]% of [net revenue / first-year contract value] from the referred customer.] [Option B - flat fee: [CURRENCY/AMOUNT] per qualifying Referral.] The fee is [one-time / recurring for [N] months]. 4. PAYMENT The Company will pay within [N] days of [the customer's payment / invoice]. [Applicable taxes, e.g. GST, are handled as required by law.] Fees are payable only on amounts the Company actually receives. Refunds, chargebacks or cancellations reverse the related fee. 5. NO AUTHORITY The Referrer is an independent party, not an agent, employee or partner of the Company, and may not negotiate, make promises, set prices or sign anything on the Company's behalf. 6. CONDUCT AND REPRESENTATIONS The Referrer will describe the Company and its products honestly, make no false or misleading claims, and comply with applicable advertising, anti-bribery and data-protection laws when sharing prospect details. 7. NON-EXCLUSIVE This Agreement is non-exclusive. Each party may work with others and may decline any Referral. 8. TERM AND TERMINATION This Agreement runs from [START] and either party may end it on [N] days written notice. Fees already earned on qualifying Referrals before termination remain payable. 9. CONFIDENTIALITY Each party keeps the other's confidential information private and uses it only for this Agreement. 10. DATA PROTECTION The Referrer will share prospect personal data only with a lawful basis and will pass on any consent or notice the law requires. 11. LIABILITY To the extent the law allows, neither party is liable for indirect loss, and the Company's liability for fees is limited to fees properly due. 12. GOVERNING LAW AND DISPUTES This Agreement is governed by the laws of [jurisdiction], with disputes subject to [courts / arbitration seat]. Signed for the Company: __________ Signed for the Referrer: __________ Name / title / date Name / title / date

- **Referral fee (clause 3).** Choose a percentage or a flat fee, and say whether it is one-time or recurring. Percentages suit high-value deals; flat fees suit volume. Define the base the percentage applies to, for example net revenue rather than gross.
- **Payment (clause 4).** Tie payment to money you actually receive, and make clear that refunds, chargebacks and cancellations reverse the fee. This stops you paying commission on revenue that never lands.
- **No authority (clause 5).** Keep this clause. A referrer who can make promises or quote prices on your behalf creates real legal exposure.
- **Conduct and data protection (clauses 6 and 10).** Require honest representations and lawful handling of prospect data. A referrer sharing contact details without a lawful basis can create data-protection liability.
- **Term and termination (clause 8).** Make clear that fees already earned survive termination, so neither side is tempted to end the agreement to avoid paying. ## Common mistakes to avoid - No written registration of prospects, which turns every borderline case into an argument.
- Paying on gross revenue, or before the customer has paid you.
- Recurring fees with no end date, which can outlast the value of the introduction.
- Ignoring data-protection rules when prospect contact details are shared.
- Letting the referrer speak for the company without limits. ## A note on jurisdiction Referral arrangements vary by jurisdiction. In India, a referral agreement is a contract under the Indian Contract Act, 1872, referral fees usually attract GST, and data sharing engages data-protection rules. Some regulated sectors, such as financial services and legal services, restrict or prohibit paying for referrals, so check sector rules before you sign. In the UK, Ireland, Singapore, Australia and the US, advertising-disclosure, anti-bribery and competition rules differ, and several regulated professions limit referral fees. Treat "varies by jurisdiction" as the honest default, and check sector-specific rules in any market where you refer or receive referrals. ## Where a contract workspace helps A template gets you a solid referral agreement. The ongoing work is keeping the qualifying-referral and fee terms consistent across many partners, reviewing each partner's version for weak terms, tracking which referrals have converted and which fees are due, and governing versions as the programme grows. All of that can live in one AI workspace tuned to how your company partners. [Adira](https://adiralaw.com) is one such single workspace. This template alone is enough to put a fair referral agreement in place; the workspace keeps drafting, review and tracking joined up.