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.

Information to customize

• Company's legal name

• Company's address

• Referrer's legal name

• Referrer's address

• Definition of a qualified referral

• Fee amount or formula

• Event that triggers payment (e.g. closing, first payment received)

• Payment timing after trigger

• Is the referral in a regulated industry (real estate, insurance, lending)?

• Governing state law

• Date of signature

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Frequently asked questions

How is a referral fee agreement different from a sales representative agreement?

A referral agreement covers only the introduction of a prospective customer, with no ongoing selling, negotiating, or account-management activity by the referrer. A sales representative actively sells on the company's behalf, which in many states triggers statutory notice and prompt-payment protections that don't apply to a pure referral source.

Can anyone receive a real estate referral fee?

Generally no. Real estate referral fees are heavily regulated under the federal Real Estate Settlement Procedures Act (RESPA) and state real estate licensing law, and an unlicensed person typically cannot lawfully receive one. Confirm licensing status before using this template for a real estate referral.

Do we need to disclose a paid referral relationship publicly?

If the referral is made in a public review, social media post, or similar endorsement, FTC guidance on endorsements generally requires clear disclosure of the paid or incentivized relationship between the referrer and the company.

Is there a federal law setting minimum referral fee terms?

No general one. Referral fees are governed by ordinary state contract law, except in specifically regulated industries like real estate, insurance, and lending, where separate federal and state licensing rules apply.

What happens if the referrer starts negotiating deals instead of just introducing prospects?

That risks converting the relationship into something closer to a sales representative arrangement, which can trigger state sales-representative statute protections the parties didn't intend to create. Keep the referrer's role strictly limited to introductions if that's the intended relationship.

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