US Referral / Finder's Fee Agreement template

Overview

A referral or finder's fee agreement compensates a person or business for introducing a new customer or business opportunity, without that referral source taking on any ongoing selling, negotiating, or account-management role. This is a materially narrower relationship than an independent sales representative agreement, and the distinction matters legally: a pure referral source who merely makes an introduction and has no further involvement generally has no statutory protections under state sales-representative statutes, because those statutes typically apply only to a person who solicits orders or otherwise actively represents the principal in sales — a referral source is neither, and should be documented as such to avoid ambiguity about which legal regime applies. There is no dedicated federal statute governing referral fees generally, though sector-specific rules can override this template entirely: real estate referral fees are heavily regulated under the federal Real Estate Settlement Procedures Act (RESPA) and state real estate licensing law (an unlicensed person generally cannot receive a real estate referral fee at all); referral fees tied to loans or insurance are restricted by state insurance and lending licensing statutes; and any referral fee arrangement disclosed as "free" or incentivized without proper disclosure risks FTC Act Section 5 issues if the relationship isn't disclosed to the referred customer where required (for example, in an endorsement or influencer-style referral covered by the FTC's endorsement guidance). When to use it: for a one-time or occasional introduction of a prospective customer, business partner, or opportunity to the paying party, where the referrer does not perform ongoing sales, negotiation, or account management. Parties: the company (who pays the fee) and the referrer (who makes the introduction). Key clauses: scope of the referral relationship, explicitly excluding any sales, negotiation, or solicitation activity by the referrer; definition of a "qualified referral" that triggers a fee; the fee amount or formula (a flat amount or a percentage of the resulting transaction value) and payment trigger (typically on closing or on payment received from the referred customer); payment timing; independent contractor status; confidentiality; a clause excluding any partnership, agency, or employment relationship, and expressly stating the referrer has no authority to bind the company; term and termination; and a statement that the referrer is not a sales representative and this agreement does not create rights under any state sales- representative statute. Pitfalls to avoid: describing the referrer's role broadly enough that it starts to look like active selling (negotiating price, closing deals, managing the account), which can inadvertently convert the relationship into one governed by a state sales-representative statute with its own notice and prompt-payment requirements; using this template for real estate, insurance, or lending referrals without first confirming the referrer holds any license required to lawfully receive such a fee; and failing to disclose the paid relationship where the referral is made publicly (a review, a social post, a recommendation), which can trigger FTC endorsement disclosure requirements.