How to Review a Referral Agreement: A Clause-by-Clause Checklist

How to review a referral agreement without missing what matters Reviewing a referral agreement comes down to two questions: when exactly is a fee earned, and when exactly is it paid. Most referral disputes are not about the headline rate; they are about whether a particular customer counts, whether the fee survives a cancellation, and whether it keeps paying after the introduction has done its work. This checklist works whether you are the referrer checking you will be paid fairly or the company checking you are not overcommitting. This is general guidance, not legal advice. Referral arrangements can engage tax, competition, data-protection and sector rules that vary by jurisdiction, so have a qualified professional review anything high-value or unusual. ## A fast first pass before you read clause by clause Spend two minutes on these. They decide how carefully you read the rest. - What counts as a referral? How a qualifying referral is defined, and who proves it.

• What is the fee, and on what base? Percentage or flat, and of gross or net.
• When is it paid? On signature, on the customer's payment, or on something else.
• How long does it pay? One-time, or recurring, and for how long. ## The clause-by-clause checklist 1. Qualifying referral. How a referral is registered and what disqualifies it. Red flag: no requirement to register prospects in writing before contact, which makes every borderline case arguable; or an exclusion so wide that almost any prospect can be called "already in the pipeline". 2. Referral fee. The rate, the base it applies to, and whether it is one-time or recurring. Red flag for a referrer: a percentage of "net" with net defined so narrowly it shrinks the fee to little. Red flag for a company: an open-ended recurring fee with no end date. 3. Payment timing and conditions. When the fee becomes due and what reverses it. Red flag for a referrer: payment only after the customer pays, with long credit terms, so you wait months. Red flag for a company: a fee due on signature even if the customer never pays. 4. Refunds, chargebacks and cancellations. Whether these reverse the fee. Red flag: silence, which leaves the company paying commission on revenue it had to return. 5. No authority. Whether the referrer is barred from making promises, quoting prices or signing on the company's behalf. Red flag: a referrer who can bind the company, which creates real exposure. 6. Conduct and representations. Whether the referrer must describe the company honestly and follow advertising rules. Red flag: no limit on what the referrer can claim, which can leave the company liable for misleading statements. 7. Exclusivity. Whether either side is locked to the other. Red flag: an exclusivity obligation hidden in a non-exclusive-looking agreement, or a territory lock with no performance requirement. 8. Data protection. How prospect personal data is shared and on what lawful basis. Red flag: prospect contact details passed with no consent or lawful basis, creating data-protection liability. 9. Term and termination. How the agreement ends and what happens to earned fees. Red flag: termination that wipes out fees already earned on converted referrals. 10. Liability and governing law. Caps, indemnities, the governing law and the dispute forum. Red flag: a forum impractical for one side to use. ## Red flags to negotiate or walk away from - No written registration of prospects.
• Fees due before the company has been paid, or surviving a refund or chargeback.
• Recurring fees with no end date on a one-time introduction.
• A referrer able to make promises or quote prices for the company.
• Prospect data shared with no lawful basis.
• Earned fees forfeited on termination. Raise these in writing before signing. Because a referral programme runs across many partners and deals, a weak clause repeats on every one. ## How to run this review in ten minutes You can triage a referral agreement quickly if you read the clauses in the order that money flows through them. 1. Start with the qualifying-referral clause. This is the gate. If it is vague about registration, timing or pipeline exclusions, every later clause inherits the uncertainty.

2. Then read the fee and payment clauses together. Confirm the rate, the base it applies to, when it is paid, and what reverses it. This tells you whether the headline rate is real or whatever is left after deductions.
3. Then check authority and conduct. Make sure the referrer cannot bind the company and must represent it honestly, with data handled lawfully.
4. Finally, read termination and governing law. Confirm earned fees survive termination and that the dispute forum is usable. Write down each clause you would change and send them as one list. For a referral programme you plan to repeat with many partners, it is worth getting your own template right once so every partner signs the same clean terms. ## A note on jurisdiction Referral agreements are read differently by jurisdiction. In India, a referral agreement is a contract under the Indian Contract Act, 1872, fees usually attract GST, and data sharing engages data-protection rules. Some regulated sectors, including parts of financial and legal services, restrict or prohibit paying for referrals. In the UK, Ireland, Singapore, Australia and the US, advertising-disclosure, anti-bribery and competition rules differ, and several regulated professions cap or ban referral fees. Treat "varies by jurisdiction" as the honest default, and check sector rules in every market where you operate. ## Where a contract workspace helps One referral agreement is manageable to read by eye. It grows harder when a referral programme spreads across many partners on slightly different fee and qualification terms, with conversions, payment conditions and end dates to track. The approach worth borrowing is to keep drafting, reviewing, tracking and governing referral agreements in a single AI workspace tuned to your programme, so partner terms and key dates sit together rather than apart. Adira follows that single-workspace approach.