Free Referral Agreement Template

A referral agreement is a contract between a company and a referral partner who introduces new customers to it. The partner makes the introduction, the company signs the deal with the customer directly, and the partner gets a referral fee for each introduction that turns into a paid deal.

Many referral deals start as a handshake about a percentage. Disputes usually come from what the handshake left out: which customer was whose, which payments count, and whether fees continue after the cooperation ends. A referral agreement template settles these points in writing before the first fee is due.

A referral agreement fits when the partner’s role is only to introduce customers. The partner does not sell, sign contracts, or collect money for the company, and neither side can make commitments for the other.

The arrangement is usually non-exclusive. It means the company can work with other partners, and the partner can refer customers elsewhere. Here are a few cases when a referral agreement can be applied:

Some situations need a different arrangement altogether:

Before drafting, the partners agree on the main points below. Each of them is explained in more detail in the next sections.

A common belief is that once a partner mentions the company to someone, any deal that person ever signs earns a fee. A referral contract sets a clearer rule. A referral usually counts only when three things can be shown:

The company’s written answer is the main evidence for both sides. Silence does not mean acceptance, but the company cannot simply stay quiet to avoid paying. It either accepts the referral or explains the reason it can’t. For example, the prospect is already a customer, is already in documented negotiations, or was referred earlier by someone else. The company keeps its sales records ready to show that reason, and the partner keeps the date it submitted the referral.

The time limits should match how long deals really take to close. If a typical customer needs four months to sign, a 60-day window means good introductions expire without a fee.

When two partners refer the same prospect, the first complete, documented referral wins, unless everyone involved agrees otherwise in writing. The customer’s parent or sister companies and unrelated later purchases do not count automatically. A partner who expects credit for them raises this before signing.

A referral fee is usually set in one of two ways:

A percentage is typically a commission on money the company actually collects and keeps, not a share of profit. Sales tax, refunds, credits, chargebacks, and listed pass-through costs are taken out first, but the company’s overhead is not. The partner shares the collection risk: an unpaid invoice earns no fee.

If a customer gets a refund, only the fee on the refunded amount is reversed. A fixed fee is reversed only if the first payment is returned in full. The company explains the adjustment and usually takes it from future fees.

Referral fees are usually paid monthly. Within an agreed number of days after each month ends, the company sends a statement showing which customer payments qualified, what was excluded or adjusted, and how the fee was calculated. The partner can ask for supporting records, with other customers’ details hidden where needed. It helps to decide who at the company prepares these statements before the first fee is earned.

The agreement also names the payment method, such as ACH transfer, check, wire transfer, or PayPal. Bank details written in the agreement are sensitive, so the signed copy is shared only with the people who need it.

When a partner recommends the company in a review, a social media post, or an email to clients, it should clearly say that it gets paid for referrals. The company can be held responsible if a partner hides the payment or makes false claims, so it helps to give a short, clear line, such as “I get a referral fee if you sign up through me,” placed where people will see it.

The partner also needs the prospect’s permission before passing on their contact details. Without the company’s written approval, the partner does not:

Either side can usually end a referral fee agreement without a reason by giving written notice a set number of days in advance, or sooner if the other side seriously breaks the agreement and does not fix it in time. After that, no new referrals can be submitted. Referrals accepted before the end keep their original signing window, and fees on the resulting customers are still paid, even if the customer pays later.

Writing this down matters. When a contract says nothing about fees after termination, a court may decide for the parties. In a 2022 Texas case, a fired salesperson was allowed to claim commissions on sales that closed after he left, because his contract was silent on the issue. A clear rule in the agreement avoids this kind of dispute.

A referral fee agreement template also usually covers:

The referral agreement is worth reviewing when the company adds a new product line, the fee model changes, the partner starts quoting prices or closing deals, or the referrals move into a regulated field.

Drafting a referral agreement mostly means agreeing on details: how long a referral stays valid, which payments earn a fee, and what happens after the cooperation ends. Loio keeps each of these steps simple, from the first draft to both signatures.