A finder's fee agreement is a form document outlining an agreement where one party agrees to pay another party for referring new business or clients. It specifies how much the fee will be, how and when it will be paid, and what constitutes an accepted referral under the agreement.
Finder's Fee Agreement Template
Fill in your referral terms online and download this customizable finder's fee agreement template. You can easily edit and print the agreement in Word or PDF format. Sign it electronically and get your referral deal in place today.
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About This Template
This sample finder's fee agreement template is designed for situations where one party introduces customers or business opportunities to another party in exchange for a percentage fee or flat fee. It includes provisions for the referral relationship, what constitutes acceptance, and when payment is due.
- Addresses both percentage and flat fee finder's fees
- Provides a defined trigger for acceptance: the introduction isn’t accepted until both the company and the referred party sign a contract
- Contains a set-off provision allowing the company to offset any amounts owed to it by the finder
- Either party can terminate the agreement by giving five days' written notice
- Maintains the confidentiality of the agreement between parties, except to lawyers or accountants who need to know
Download this free sample finder's fee agreement template in Word or PDF format.
Who It's For
Use this agreement when you get paid for referring clients, customers, or investors. Here are some examples where this could apply:
- Independent business brokers who refer buyers to businesses for sale
- Recruiters and other HR personnel who place employees for a commission
- Real estate bird dogs who refer off-market deals to wholesalers or dealers
- B2B salespeople who get a percentage of sales from identified contracts
- Startup consultants who receive commissions for introducing investors and clients.
Essentially, if you’re in the business of referring deals, use this document to ensure you get paid upon deal closing.
What's Included in the Finder's Fee Agreement Template
This template covers the following:
- Referral Agreement: specifies the role of the finder and that the company may accept or reject referred parties. It also specifies when the agreement is in effect.
- Referral Fee: specifies a percentage of the "gross value" of the first deal and includes a defined payment period following execution of the contract.
- Payment Terms: specifies that no fee is due until the company has executed a contract with the referred party.
- Set-off Rights: allow the company to set off any amounts due to the finder.
- Termination: either party can terminate the agreement with five days' written notice
- Governing Law: includes a state-specific jurisdiction clause.
- Confidentiality: both parties agree not to disclose the existence or terms of the agreement to others, except to their attorneys and accountants.
How to Write a Finder's Fee Agreement
The template deals with boilerplate. Below are the negotiables that actually require some forethought.
1. Establish parameters of "acceptance" for your deal
The template conditions payment on the company and the referred client entering into a contract. If your deal will close on a loser mechanism (letter of intent, first meeting), rewrite this provision prior to signing. Ambiguous language around acceptance is the number one reason finders don't get paid.
2. Confirm your fee structure
The percentage of the contract is the default. Payments can get messy when contracts are priced with variables or renewal options. Are you paying a percentage on just the initial contract value, or on all revenue produced from a referred client? Agree upfront and write your terms clearly in the fees section.
3. Agree on a reasonable payment period
The template provides a place for you to fill in a payment window. 15-30 days after execution is typical. Lengthy payment windows leave you open to collection issues; short windows create pushback if your client is expected to pay on net terms.
4. Determine how to handle multiple referrals
The referral agreement provides for payment for all clients referred during the term of the agreement. If there's a good chance you'll receive more than one referral from a finder, you may want to consider placing a cap on the total fees owed under the agreement. You may also want to restrict the finder from referring the same clients to your competition.
5. Know your state's regulations on finder agreements
Referral fee agreements are treated like standard commercial contracts in most states. But there are a few industries (real estate, financial services) that regulate them separately. You can customize the governing law clause in the template, but it doesn't hurt to have a local attorney double-check before you pay and download your agreement online.
FAQ
Yes. A finder's fee agreement is a valid contract. If signed by both parties, it will be legally binding. The only thing that will matter in the event of a dispute is whether there was an accepted referral as defined by the terms outlined in the agreement.
Finder's fees will range anywhere from 3% to 10% of the initial contract value, but will vary based on industry standards. Brokers typically charge higher fees, while B2B sales referral fees should fall between 3-5%.
Yes. You can download our finder's fee agreement template for free in Word or PDF. Feel free to edit and customize the agreement template in Word before signing it online when both parties are ready to finalize.
This agreement covers all referrals of clients made during the agreement's term. Each referral is treated separately and will need to meet the acceptance criteria to qualify for a fee.
Included in this agreement is a "survival clause" which will cover any actions that occurred prior to termination. If you referred a client but neither you nor the client has signed a contract with the company yet, whether or not you get the fee will depend on when/how you defined acceptance in your agreement and state law.
