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Referral Agreement (Free Download + AI Generator)
Greg Mitchell | Legal consultant at AI Lawyer
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A Referral Agreement is a business contract that sets the ground rules when one party introduces potential customers, clients, or deals to another party in exchange for compensation or other value. It’s commonly used for sales partnerships, professional services, and industry networks where introductions happen frequently. A clear written framework helps prevent payment disputes, protects confidential information, and reduces compliance risk in regulated industries. It also helps both sides align expectations about what counts as a qualified lead, how tracking works, and when payment is earned.
TL;DR
Defines how introductions are made and compensated, so both parties understand the deal.
Sets objective eligibility and timing rules, reducing “you owe me” disagreements.
Adds guardrails for confidentiality and brand use, limiting misuse of data or marketing claims.
Helps document the arrangement with a structured template, making it easier to customize and review.
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Disclaimer
This material is provided for general informational purposes only and does not constitute legal advice. Contract enforceability and referral-related restrictions can vary by state, industry, and professional rules. You should consult a qualified attorney for guidance tailored to your specific situation.
Who Should Use This Document
This document is useful for individuals and organizations that regularly connect buyers and sellers, clients and service providers, or partners and vendors. It works in both B2B and B2C settings and is common for agencies, consultants, SaaS partners, recruiters, and brokers. It becomes especially important when money changes hands, multiple leads are in play, or the relationship spans multiple months. If referrals involve public endorsements, marketing posts, or reviews, build in disclosure expectations consistent with the FTC’s endorsement guidance for material connections. For referral programs that collect or transmit customer contact details, it also helps to align lead handling with baseline privacy and security practices, such as the FTC’s Safeguards Rule compliance resources (where applicable) and general principles in the NIST Privacy Framework.
Audience | Typical use cases |
|---|---|
Individuals (consultants, connectors) | Earning compensation for business introductions while avoiding misunderstandings on timing and eligibility. |
SMBs / startups | Building partner channels with clear rules for lead ownership and tracking. |
Mid-size / enterprise | Standardizing partner programs across regions, products, or business units. |
Professional services | Coordinating introductions for legal, accounting, marketing, or advisory services. |
Regulated industries | Adding compliance controls where payments for introductions can trigger licensing or kickback concerns. |
This document is most valuable when referrals are tied to compensation, brand/marketing activity, or sensitive lead data — so eligibility, tracking, disclosures, and compliance boundaries are clear before the first deal closes.
What Is a Referral Agreement?
A Referral Agreement is a written contract that governs how one party introduces prospects to another party and how compensation (if any) is calculated and paid. In plain terms, it turns informal “I’ll send you business” behavior into a structured arrangement that both sides can follow and verify. Because it’s a contract, enforceability generally depends on state law and basic contract principles like offer, acceptance, and consideration (see the Legal Information Institute’s overview of contract law basics and its explanation of consideration).
In many industries, the business purpose is straightforward: referrals are a cost-effective way to generate leads, and the referring party wants predictable compensation for value created. The legal purpose is risk control: it documents the relationship so payment triggers, scope, and restrictions aren’t left to memory, email threads, or verbal understandings. This matters even more when a prospect might be introduced by multiple sources, when revenue is earned over time, or when a conversion depends on factors outside either party’s direct control.
A well-drafted document clarifies whether the referring party is an independent contractor and whether they have authority to bind the receiving party — usually they should not. For background on worker classification concepts that often come up in these relationships, see the IRS guidance on independent contractor vs. employee. It should also address what the referrer can say publicly; if referrals involve endorsements or reviews, disclosure of material connections can be required under the FTC’s Endorsement Guides resources.
Typical situations where this document is key:
A consultant introduces a business buyer to a vendor and expects a fee after the deal closes.
A software company runs a partner program and pays commissions for qualified leads.
Two service providers exchange introductions and want consistent rules for tracking and payment.
It works best when it turns introductions into objective, trackable rules — defining qualification, attribution, and payment triggers — so both parties can measure outcomes consistently and prevent disputes before they start.
When Do You Need a Referral Agreement?
You need this document when introductions are tied to compensation, exclusivity, ongoing relationships, or any meaningful risk of disagreement. If payment depends on future events — like a closed deal, collected revenue, or a retained client — written rules become critical because memories and incentives can diverge over time. Clear terms also support enforceability under basic contract principles, including clarity on obligations and consideration (see the Legal Information Institute’s overview of contract law basics and its explanation of consideration).
It’s also strongly advisable when any of these conditions are true:
Multiple sources may claim credit for the same lead (employees, partners, agencies).
The sales cycle is long, and payment could be disputed months later.
The referring party wants to use your name, logo, or marketing materials.
Prospect data is sensitive (health, financial, legal, or personal identifiers).
The industry is regulated, where payments for introductions can be restricted.
A practical “red flag” is when a party asks for a percentage of revenue but can’t describe how it will be measured or verified. Another is when a party wants to “negotiate with the customer” on your behalf — this can blur the line between a simple introduction and regulated brokerage activity in some sectors. For mortgage-related and settlement-service referrals, federal restrictions are addressed in the CFPB’s Regulation X (12 CFR Part 1024) and explained in the CFPB’s RESPA overview. In healthcare, payments connected to referrals can raise fraud-and-abuse concerns; the HHS OIG summarizes key restrictions in its Fraud & Abuse Laws guidance. For investment-related introductions, transaction-based compensation can create broker-dealer risk, and the SEC provides background in its Guide to Broker-Dealer Registration. If the arrangement involves public endorsements or testimonials, build in disclosure rules aligned with the FTC’s Endorsement Guides and the underlying regulatory text in 16 CFR Part 255. If prospect contact data is shared, consider minimum safeguards and permitted-use limits consistent with the FTC’s Safeguards Rule resources where applicable, and governance framing like the NIST Privacy Framework.
Keep the list above as your “go/no-go” screen — when compensation is contingent, attribution can be contested, marketing or data sharing is involved, or sector rules like RESPA, healthcare fraud-and-abuse limits, or broker-dealer registration may apply, a written referral agreement is the safest way to define boundaries and prevent disputes.
Related Documents
This document often sits alongside other documents that address marketing practices, confidentiality, and payment mechanics. Thinking in a “document set” helps align business operations, compliance expectations, and customer communications.
Related document | Why it matters | When to use together |
|---|---|---|
Protects prospect lists, pricing, and deal terms | When prospect or pricing information is shared | |
Clarifies non-employment and tax responsibilities | When the referrer does ongoing work beyond introductions | |
Marketing/brand guidelines | Controls use of names, logos, and claims | When the referrer markets publicly or uses your brand |
Commission plan or partner program terms | Standardizes rules across multiple partners | When you run a repeatable channel program |
Invoice and payment terms addendum | Sets timing, disputes, and offsets | When payments are recurring or tied to collected revenue |
What Should a Referral Agreement Include?
A strong document focuses on clarity and enforceability. The best drafts make it easy to answer “what happened?” and “what is owed?” without guesswork. For baseline contract concepts, see the Legal Information Institute’s overview of contract law.
Parties and relationship. Identify the parties and confirm the referrer has no authority to bind the receiving party. Clear boundaries reduce misrepresentation risk. If classification could be questioned, align terms with IRS guidance on employee vs. independent contractor.
Scope of introductions. Define what’s covered/excluded and whether exclusivity applies. A defined scope prevents attribution fights. Add industry guardrails where needed (e.g., mortgage-related contexts under the CFPB’s Regulation X).
Lead submission and qualification. State how leads are submitted, what minimum information is required, and the attribution window/duplicate rules. Objective criteria reduce disputes and make tracking defensible. If lead data is shared, set permitted uses and minimum safeguards (see the FTC’s Safeguards Rule resources where applicable).
Compensation and payment mechanics. Specify the fee model, payment base (e.g., collected net revenue), offsets, caps, and due dates, plus basic reporting/invoicing. A measurable base and clear trigger prevent revenue-calculation conflicts. If promotion is involved, require disclosures aligned with the FTC’s Endorsement Guides and 16 CFR Part 255.
Compliance, confidentiality, and end-of-deal rules. Limit marketing claims, protect prospect lists/pricing, and define term/termination (including any time-limited “tail”) and dispute process. Tight guardrails reduce regulatory exposure and post-termination fights. For a governance lens on handling shared lead data, see the NIST Privacy Framework.
Keep it operational — define who does what, what counts as a qualified lead, how attribution works, when payment is earned, and what happens when the relationship ends.
Legal Requirements and Regulatory Context
In the U.S., these arrangements are generally governed by state contract law, so enforceability depends heavily on clear terms and consistent performance. Ambiguity around duties, timing, and payment triggers is what usually turns a business deal into a legal dispute. For a plain-English baseline on contract formation concepts, see the Legal Information Institute’s overviews of contract law and consideration.
Advertising and endorsements are a frequent compliance issue. If the referrer promotes your services publicly, the FTC expects disclosure of “material connections,” as explained in its Endorsement Guides resources and the rule text in 16 CFR Part 255. For quick disclosure examples, the FTC’s Disclosures 101 guide is useful.
Regulated and professional contexts can add restrictions. Attorney referral fee sharing is often constrained by state ethics rules modeled on the ABA’s Model Rule 1.5(e). Mortgage and settlement-service referrals can implicate RESPA, including 12 U.S.C. § 2607 and the CFPB’s Regulation X. Healthcare and investment-related arrangements can raise anti-kickback or registration issues, with helpful starting points in the OIG’s Fraud & Abuse Laws guidance and the SEC’s Guide to Broker-Dealer Registration.
To reduce legal and compliance risk, make compensation and attribution objective, require truthful marketing with appropriate disclosures, and add industry-specific guardrails (professional ethics, RESPA, anti-kickback, broker-dealer rules) so the arrangement stays enforceable across states and regulated contexts.
Common Mistakes When Drafting a Referral Agreement
One common mistake is leaving lead qualification vague — no minimum required information, no acceptance method, and no attribution window. Ambiguity on qualification is the fastest route to a payment dispute. Clear, objective criteria also support enforceability under basic contract principles (see the Legal Information Institute’s overview of contract law and its explanation of consideration).
A second mistake is using compensation language that can’t be measured. Percentages are tied to “revenue” without defining gross vs. net, collected vs. invoiced, or how refunds/chargebacks are handled. If the payment base isn’t defined, the calculation will be fought later. If the referrer promotes you publicly, this can also create compliance risk unless disclosures and claims are controlled under the FTC’s Endorsement Guides and 16 CFR Part 255.
A third mistake is ignoring industry-specific restrictions. Rules can override your deal in professional and regulated settings — especially attorney fee sharing (see the ABA’s Model Rule 1.5(e)), mortgage/settlement-service referrals under RESPA (see 12 U.S.C. § 2607 and the CFPB’s Regulation X), and healthcare-related introductions (see the OIG’s Fraud & Abuse Laws guidance).
A fourth mistake is failing to plan for termination and post-termination payments. If there’s no clear “tail” rule for accepted leads and no simple dispute process, the relationship can end in conflict. Termination clauses should define what qualifies after termination and for how long. If you want a structured off-ramp, the U.S. Courts’ overview of Alternative Dispute Resolution can inform mediation/arbitration language.
The most avoidable disputes come from undefined lead qualification and revenue bases, unmanaged endorsement disclosures, and missing regulated-industry guardrails — so a strong agreement uses objective attribution rules, compliant marketing terms, and clear post-termination “tail” mechanics.
How the AILawyer.pro Referral Agreement Template Helps
This template helps users avoid the most frequent breakdowns by guiding them through the decisions that actually drive disputes: lead qualification, attribution windows, and payment triggers. A structured layout prompts you to define measurable terms and document a repeatable submission process, which is critical when multiple leads are in play or the sales cycle is long.
The AILawyer.pro template also highlights areas where industry rules may require a more customized approach — such as professional fee-sharing, regulated referral contexts, and marketing disclosures. It supports practical add-ons (confidentiality, brand use, reporting) without turning the document into a bloated contract. The end result is a cleaner draft that’s easier to negotiate, implement, and review with local counsel before you use it in production.
Practical Tips for Completing Your Referral Agreement
Start by mapping your deal flow: how leads arrive, who validates them, and where they’re tracked (CRM, email, partner portal). If you can’t trace a lead from submission to conversion, you can’t reliably resolve attribution disputes. Use a simple, written intake process (required fields + timestamp + acceptance confirmation) that aligns with basic contract clarity principles (see the Legal Information Institute’s overview of contract law and its explanation of consideration). If you collect prospect personal data in the process, set minimum handling rules and access limits; for relevant financial institutions, the FTC’s Safeguards Rule resources can serve as a baseline reference.
Next, choose a compensation approach that matches your business model. Flat fees are simplest; percentage models can work, but only if the base and trigger are objective (for example, “collected net revenue” rather than “estimated revenue”). Collected-revenue triggers usually reduce refund and non-payment disputes compared to invoiced-only triggers. If the referrer will promote you publicly, build in required disclosures and claim limits consistent with the FTC’s Endorsement Guides, the rule text in 16 CFR Part 255, and the FTC’s plain-language Disclosures 101 guide.
Then stress-test your draft for edge cases: duplicate leads, prior relationships, existing customers, self-referrals, or deals that close after termination. Most conflict comes from edge cases, not the standard scenario. Add clear rules for “house accounts,” attribution windows, and post-termination “tail” payments. If you want a low-friction way to resolve disagreements without immediately litigating, consider a short escalation clause informed by the U.S. Courts’ overview of Alternative Dispute Resolution.
Finally, get the right review. If the arrangement touches regulated sectors (legal, real estate, mortgage, healthcare, finance), treat the document as a draft for professional validation. For attorney referrals, fee division rules are often modeled on the ABA’s Model Rule 1.5(e). For mortgage/settlement-service referrals, RESPA restrictions appear in 12 U.S.C. § 2607 and are implemented through the CFPB’s Regulation X. For healthcare-related introductions, start with the HHS OIG’s Fraud & Abuse Laws guidance. For investment-related introductions, transaction-based compensation can raise broker-dealer issues; the SEC’s Guide to Broker-Dealer Registration is a helpful starting point.
Document a traceable lead workflow, define objective qualification and collected-revenue triggers, control endorsements with compliant disclosures, and add regulated-industry guardrails and a clear tail/dispute process so the agreement stays implementable and low-dispute.
Checklist Before You Sign or Use the Referral Agreement
Parties, scope, and role limits are clearly stated, including lack of authority to bind the other party.
Qualification and attribution rules are objective, with an acceptance method and time window.
Compensation base and trigger are measurable, including offsets for refunds or non-payment.
Payment timing and documentation are defined, with a clear dispute process.
Confidentiality and data-use limits are included, especially for prospect lists and pricing.
Termination and post-termination rules are clear, including any tail period and survival clauses.
FAQ: Common Questions About the Referral Agreement
Is this document always required?
Not always, but it’s strongly advisable when compensation depends on future events or when multiple parties may claim credit. Written rules reduce disputes and make expectations enforceable.
Can I use this for a simple one-time introduction?
Yes, as long as you keep the terms simple and focus on qualification, payment trigger, and timing. Even a small deal can turn into a dispute if the parties disagree about what was promised.
How is this different from a finder’s fee arrangement?
In everyday business language, both involve compensation for introductions. The key is the scope of activity: the more the referring party negotiates, solicits, or participates in the transaction, the more legal risk can increase, especially in regulated industries.
Can this work for real estate or mortgage-related referrals?
It can, but those areas often have licensing and federal restrictions. You should have the structure reviewed for RESPA and state licensing compliance (see Regulation X).
What about attorney-to-attorney referrals?
Fee division can be restricted and may require client consent or proportional responsibility depending on state rules. Use ethics-based frameworks as a reference and get local review (see the ABA’s Model Rule 1.5(e)).
Can I use this with international partners?
Often yes, but cross-border deals may need additional clauses for taxes, privacy, and governing law. Local legal review is recommended when money and marketing cross borders.
Get Started Today
A well-structured Referral Agreement can reduce misunderstandings, make compensation predictable, and set clear boundaries around marketing and prospect handling. Use a template to define lead qualification, attribution, and payment mechanics in a way your team can track and enforce. Download the referral contract template from AILawyer.pro or generate a customized version with our AI Document Builder — then have a local attorney review the final draft, especially if your industry has licensing, fee-sharing, or anti-kickback rules.
Sources and References
Model Rule 1.5 on fees and fee division
Regulation X (12 CFR Part 1024)
Guide to Broker-Dealer Registration
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