Introducer agreement

An introducer passes on the names of people who may want to buy. That is all. The company does the selling, sets the price, negotiates the terms and signs the contract. Keeping the arrangement on that side of the line is what makes an introducer agreement a simple document rather than a complicated one.

Why the line matters

If the introducer in fact negotiates or concludes sales of goods, it may be a commercial agent under the Commercial Agents (Council Directive) Regulations 1993, whatever the agreement calls it. That brings minimum notice periods and an entitlement to compensation or an indemnity when the arrangement ends, which is a liability most businesses setting up a referral scheme have not priced. The template therefore states plainly that the introducer must not negotiate prices or terms, or sign anything on the company's behalf, and that restriction has to hold in practice as well as on paper.

Register the introductions

Schedule 2 provides a form for registering each introduction, and using it is the difference between a clean commission conversation and an argument. Most disputes under these agreements are about whether a particular customer was introduced by the partner or was already known to the business, and a contemporaneous record settles that in a sentence. A shared spreadsheet updated within a day of each referral does the job.

Commission, and the question of repeat business

Clause 7.9 offers two positions on renewals and repeat orders: commission on the first sale only, or commission continuing for a defined period. For a subscription business the second can become a significant ongoing cost, so it is worth modelling at the rate and period you are proposing rather than agreeing in principle. Schedule 1 carries the rates, the commission period, the products covered and any territory.

Where extra rules apply

If the referred customers are consumers, or if either party is regulated, the arrangement is not purely contractual. A law firm paying for referrals is subject to the SRA rules on referral fees and to a prohibition on referral fees in personal injury matters. A financial services firm or an insurance intermediary has its own regime, and an unregulated introducer can stray into regulated activity by saying more than they should. Those are questions to settle before the scheme launches.

Tax and status

An introducer is not an employee and should not look like one. Payment against an invoice, no control over how they work, no obligation to produce a given number of introductions.

Our commercial contract solicitors set up referral and partner schemes, including where the introducer or the customer sits in a regulated sector.