Free Referral Agreement Templates & Forms (MS Word)

free referral agreement template 5

A referral agreement template is an important document on which many businesses depend. This agreement saves them both time and money. The good referrals can be extremely reliable and valuable sources of revenue and employers know this. Also, they won’t have any difficulty to pay a referral fee agreement just to get a potential prospect.

What is a referral agreement?

A referral agreement is a formal agreement between a seller and a referrer. This agreement outlines the terms and conditions that how referral sales are measured, paid, and coordinated.

Types of referral agreements:

Here are the most common types of referral agreements that you can use;


This type of referral agreement states to a client your offer for the objective of coming up with a referral agreement for a prospective client. For example, you can offer your neighbors to a house remodeling service. This includes a carpenter for a specific period to fix repairs around the neighbor’s home.

This referral agreement isn’t very common. It also refers that you would like to complete projects. It makes a situation where an acquaintance just asks you to provide the party that runs the implied referral program.


By having a referral agreement, you can provide your customer something that has an exact value which they can pass on to the referral source. Additionally, at a reasonable cost, you can use this strategy several times each year. For keeping referral in mind, it is also a low-exposure method.

This indicates that every quarter, you have to send your clients a gift certificate. After that, you should ask them to share this gift with an acquaintance. This makes the whole process of referring tangible but simple. You can indicate your appreciation by rewarding the client if such sharing of the gift certificates grabs more customers.


You always find communities who require and deserve your support. Partnering with non-profit organization and supporting their events, requirements, and goal can provide you chance to also give promotional support. For the benefit of your partner, you can get this by having an occasional promotional event.

For example, if you sign or buy a referral agreement, then for the advantage of your community partner, you can set aside a percentage of the income. Each time your partner gets benefit from whatever the sales that transpire. This way, they will feel encouraged to refer your business to others. It’s possible for you to can establish a single program only and this is the great thing about this multi-purpose strategy.


For this kind of referral, there are various referral agreement templates available. Business referrals generally happen when one company has links with the entities that are agreed to the referral program. In such a situation, they can easily get another job in the referred company when an employee gets dismissed or willingly leaves.


On a commission basis, if your business is to give to corporate or private lenders and investors referral contracts, then use a referral agreement form for your organization. The agreement should include all possible information of what a company gives to the broker and on what basis.

The importance of a referral agreement:

Joint venture marketing is considered as an old-school strategy. All the deals are usually made under the table or via handshake promises which is the biggest problem. Commission payments can get missed which is one of the biggest challenge face due to these loose arrangements. Furthermore, there is no fine process to record leads correctly. A lot of disputes arises due to these problems and challenges.

To avoid all these issues, a referral agreement comes in handy. This agreement hold all parties liable to what they initially agreed. It keeps everything above board.

Which important clauses you should include in your referral agreement?

You should include the following important clauses in your referral agreement template;

Nature of the agreement

In your agreement, you should include all of the details about your relationship with other businesses. It should determine the referee and the referrer. It should also specify how you and the other businesses plan to provides payments to each other and part of the referral fee agreement. Additionally, you should make the nature of your agreement clear. This makes sure that both parties know of their duties and obligations. This reduces the chances of misunderstandings or confusion.


This clause prohibits your partner from starting similar agreements with others. This is another essential part of this agreement.


You should also indicate how long the agreement will last in the document. The duration of the agreement can be short-term i.e. the agreement would only last two years or the long-term. An active referral agreement generally won’t have an exclusivity clause. Moreover, it won’t have any kind of quota for minimum referrals. Instead of, it will be more flexible. This is particularly for businesses who find out reliable sources of acquiring customers. If you want to partner with businesses for the purpose of promoting an occasion that’s time-sensitive, then obviously short-term agreements are more preferable.

Referral Fees

You have to follow specific method for the calculations in your referral fee agreement. Generating he fees based on commissions is another option. Also, set out the payable and due dates for these fees and the payment methods as well. When it comes to payment, this avoids any disputes in the future.

Referral Process

In the agreement, mention how you want the referral to take place. The process might be something simple like one party giving another with the important referral details via email. Some can select an online process of referral where customers can go into your referral. You should add information regarding how you plan to measure the effectiveness of your referral process. For performance, set a minimum standard.

Intellectual Property

It is important to include a clause in the agreement that allows you or other businesses to provide the other party a license. This license enables them to make use of any important intellectual property. This cause should also indicate that each party won’t misuse or disclose the other’s intellectual property.

Privacy and Confidentiality

Referrals generally include a transfer of sensitive or personal information such as the name or birth date of your customers. To comply with privacy laws, you should keep such information confidential. You have to make a detailed privacy and confidentiality clause. This clause also assists in making clear that you decide to use disclosed information in accordance with the agreement and the law.

How to create your referral agreement template?

Here are the steps that you should follow to make your referral agreement;

Determine the parties involved in the agreement

This is the first and basic step while making a referral agreement. It is the most important to know the involved parties. All the details like each party’s name, address, and other relevant information should be provided.

Consider the qualifications of the referrals

Considering the qualification of every referral directed towards you is the second step in the creation of a referral agreement. You can understand every employee better by identifying these qualifications. Moreover, it assists you in deciding which jobs the employees will be best suited for.

Payment methods

Next, you have to identify the type of payment method which you use to pay the agency that provided you with the referrals. It’s up to you whether you make payments in cash, credit, cheques, installments, debit card or net banking.

Referral expiry

Identifying the expiry date of the referrals is the next step to do. Also, set the renew date when you have to renew the agreement to continue acquiring referrals.

Revenue commission

You have to be very specific in terms of the revenues. These revenues will get subject to payments. All the returns and credits that are made from the business, you have to make notes on them.


In conclusion, a referral agreement template is a document that includes information of you providing your permission to the parties who provided you the referral. You have to make a document to protect your interests while entering into a referral agreement with other businesses.

Faqs (Frequently Asked Questions)

Is referral agreement legally binding?

A referral agreement becomes legally binding when the seller and referrer affix their signatures on the agreement.

Is referral agreement consider exclusive by nature?

The purpose of the agreement is to scale a sales force by working with many relevant partners so this agreement is exclusive by nature.

Can you make amendments in referral agreement?

You can make the amendments in the agreement according to the needs of your referrer relationships.

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