An unqualified referral can be as simple as a name or phone number. A qualified referral has been investigated and communicated with by the referrer. If a qualified referrals are needed, this must be specified.
This prevents the relevant party from entering into a similar process with other businesses or referrers.
The referrer is usually paid a specific amount per referral or a percentage commission per referral.
Whether there is a specified end date, or whether the agreement will continue until one party ends the contract for any reason set out under the agreement.
This is the specified period after the referral has been made, that the sale needs to be made in order for the referrer to earn their commission. If the sale is made after the earn out period has passed, the referrer will not make their commission.
A pay out period avoids the business having to pay the referrer forever, if the client that is referred becomes a loyal repeat customer.
The agreement should specify that the business grants the referrer the right to use any applicable intellectual property where appropriate, such as their marketing resources, during their referral process.
This clarifies how personal information is managed, in accordance with the law and the agreement. Referral businesses should inform their patrons that their details may be forwarded to third parties, so that patrons are not disgruntled because of their details being given to another business without their knowledge.
We recommend seeking legal advice before entering an agreement.
Contact us today if you require any assistance with drafting or reviewing your Referral Agreement.
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