Referral Fee Agreement where Referrer may refer potential sellers to the Buyer for a referral fee on a non-exclusive basis. The referral fee can be fixed or as a % of the net value of goods and services. This agreement is drafted in favour of the referrer.
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The Referral Fee Agreement is a legal document that outlines the terms and conditions between the Buyer and the Referrer regarding the referral of potential sellers of goods or services. The document begins by highlighting the importance of the agreement, emphasizing the need for a clear understanding of the roles and responsibilities of both parties.
The entire document is divided into several sections, each addressing a specific aspect of the agreement. The first section, titled 'Interpretation,' provides definitions for key terms used throughout the agreement, such as 'goods or services' and 'value of goods or service.' This ensures that both parties have a common understanding of the terminology used in the agreement.
The second section, titled 'Referral Term,' outlines the duration of the agreement and the engagement of the Referrer to source sellers for the Buyer. The specific terms of the referral term may vary depending on whether it is a fixed term or subject to extension by mutual agreement.
The third section, titled 'Referral Fee,' details the compensation structure for the Referrer. It specifies whether the referral fee is a fixed amount per seller or a percentage of the net value of goods or services purchased. The section also outlines the process for invoicing and payment of the referral fee.
The fourth section, titled 'Responsibilities of the Parties,' outlines the obligations of both the Referrer and the Buyer. It highlights the Referrer's responsibility to use their existing connections and channels to find prospective sellers and to promote the Buyer's services in good faith. It also addresses the Buyer's responsibility to comply with applicable laws and regulations and to enter into agreements directly with the referred sellers.
The fifth section, titled 'Confidentiality,' emphasizes the importance of maintaining the confidentiality of any information shared between the parties. It specifies that the Referrer should treat any confidential information provided by the Buyer as confidential and should only disclose relevant parts of the information to potential sellers as necessary.
The sixth section, titled 'General,' covers various general provisions of the agreement. It clarifies that the relationship between the parties is that of independent contractors and not employment or partnership. It also addresses the requirements for giving notices, waivers, and modifications to the agreement.
The seventh section, titled 'Termination,' outlines the circumstances under which either party can terminate the agreement. It specifies that termination can occur in the event of a breach of the agreement, insolvency of either party, or by mutual agreement.
The eighth section, titled 'Consequences of Termination,' details the actions to be taken upon termination of the agreement. It specifies that the Referrer should cease promoting the Buyer's goods or services and that any outstanding referral fees should be settled within a specified timeframe.
The ninth section, titled 'No Rights under Contracts for Third Parties,' clarifies that the agreement does not confer any rights on third parties to enforce its terms.
The tenth section, titled 'Law and Jurisdiction,' states that the parties will make reasonable efforts to resolve any disputes amicably and in good faith. It also specifies the jurisdiction for any legal proceedings related to the agreement.
The eleventh section, titled 'Notices and Service,' provides instructions for serving notices under the agreement. It specifies the methods of delivery and the deemed time of receipt for each method.
The document concludes with the signatures of the authorized representatives of both parties, indicating their agreement to the terms and conditions outlined in the agreement.
To use the Referral Fee Agreement effectively, follow these steps:
1. Familiarize yourself with the document: Read the entire agreement carefully to understand its purpose, terms, and obligations.
2. Customize the agreement: Fill in the necessary information, such as the names and addresses of the Buyer and Referrer, as well as any specific details related to the referral term and fee structure.
3. Seek legal advice if needed: If you have any questions or concerns about the agreement, consult with a legal professional to ensure that it meets your specific requirements and complies with applicable laws.
4. Establish clear communication channels: Maintain open lines of communication with the Referrer to discuss the referral process, expectations, and any updates or changes that may arise.
5. Adhere to confidentiality obligations: Treat any confidential information shared by the Buyer with the utmost care and ensure that it is only disclosed to authorized individuals as necessary for the referral process.
6. Fulfill responsibilities diligently: Both the Referrer and the Buyer should fulfill their respective responsibilities as outlined in the agreement. The Referrer should actively seek potential sellers, while the Buyer should comply with relevant laws and regulations and enter into agreements directly with referred sellers.
7. Keep accurate records: Maintain records of all referrals made and the resulting purchases of goods or services. This will help in reconciling referral fees and issuing accurate invoices.
8. Timely payment of referral fees: As the Buyer, ensure that referral fees are paid within the specified timeframe after receiving the Referrer's invoice. Prompt payment will help maintain a positive working relationship.
9. Monitor and evaluate the agreement: Regularly review the effectiveness of the agreement and make any necessary adjustments or amendments to ensure its continued relevance and suitability.
10. Termination and post-termination obligations: If either party wishes to terminate the agreement, follow the specified procedures and fulfill any post-termination obligations, such as ceasing promotional activities and settling any outstanding referral fees.
By following these steps, you can effectively use the Referral Fee Agreement to establish a mutually beneficial relationship between the Buyer and the Referrer and ensure clarity and fairness in the referral process.