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Free Referral Agreement templates (Australia)

Here's why a referral agreement can be an invaluable tool for businesses.

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Incentivising referrals from other businesses is a great way to expand your client base without having to manage in full the end-to-end processes of securing new customers or clients. A referral agreement can help you manage those relationships between your organisation and companies that send business your way.

Here's what you need to know about a referral agreement, including how to write one and where to pick up a handy template.

What is a Referral Agreement?

A referral agreement is a formal contract between two parties: a referrer and a business. It is a document in which the referrer agrees to send over potential clients to the business, usually in exchange for a set fee. Many companies enter into such agreements because quality referrals can offer a reliable source of revenue.

In mutual referral agreements, both parties will agree to refer clients to each other as a sort of reciprocal arrangement.

When should I use a Referral Agreement?

You can choose to create a referral agreement for your business at any time. Most commonly, companies may decide to implement a referral agreement for two reasons:

  • To incentivise and encourage others to refer users to your business.
  • To formalise the relationship with a business that already refers clients to your company.

What should a Referral Agreement include?

The contents of your referral agreement will be different depending on the type of work your business carries out. Here are a few key things to include in your referral agreement:

  • Purpose of the agreement. Essentially, this opening section will include a definition of the expected outcome between you and your referring partner.
  • Referral arrangement. You'll want to state clearly who is referring and who is the referee.
  • Compensation for referrals. How will the other company pay you for the referral work?
  • Terms of the agreement. Include any other key details of how the partnership will work.
  • Right and responsibilities of each party involved. As well as contract rights, both parties will have contract obligations to meet. Having this stated will outline the duties that each party is legally responsible for.
  • Confidentiality clause. Including a confidentiality and privacy clause will help to clarify how you'll handle any personal information according to your agreement and the law.
  • Grounds for termination. It may be a good idea to include in writing an agreement that calls for a contract termination owing to a specified reason.
  • Indemnity clause. You could be compensated a loss or future losses if the other party is unable to deliver on what's been agreed.
  • Use of intellectual property. Being clear on what not to disclose in terms of each organisation's intellectual property can futureproof you against disagreements in the future.
  • Exclusivity of the agreement. You may decide to add an exclusivity clause to prevent your referring partner from undertaking a similar arrangement with another business.

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How effective is a Referral Agreement?

A referral agreement can be a useful tool not only in building a wider network of customers but also in establishing long-lasting and trusting relationships with other businesses.

By working successfully with referral partners, you can reap the indirect benefits of a referral agreement too, such as having more time to focus on other areas of the business, increasing your credibility, and improving brand awareness.

Do I need a lawyer for a Referral Agreement?

You don't have to hire a lawyer to help you draft up your referral agreement, but doing so can be very beneficial. A referral agreement is an important document to get right, and a legal professional can help you to tailor it exactly to your business needs.

Alternatively, you can use a referral agreement template for Australia as a cost-effective way to make your life a little easier.

How do I write a Referral Agreement?

Before you begin writing your referral agreement, you must decide on the commission structure that you wish to implement, i.e. how much you are going to pay a business or individual for a referral and at what point.

Once you've settled on your compensation, here a few key questions worth keeping in mind regarding your referral agreement:

  • What is the relationship between your business and the referer?
  • Will you compensate for qualified or unqualified referrals?
  • What are the start and end dates of the payout period?
  • Is the referral agreement exclusive, or will you extend the offer to other parties?
  • Would a clause discussing intellectual property be useful?
  • What are the general rights and obligations of the parties involved?
  • Do you need to include a confidentiality clause?

Where to get free legal documents and templates like a Referral Agreement

There are lots of online resources available that offer up a referral agreement template for Australia. Most will allow you to browse the template for free, but you may need to pay a one-time fee to edit and download it.

Here's where to find legal templates:

  • Lawpath. Part of a new wave of online legal resources that offers users hundreds of templates to choose from. You'll need to sign up for an account to access customisation options, but your first template is free to edit.
  • LegalVision. Signing up to Legal Vision's subscription service will give you access to unlimited legal templates, including a referral agreement.
  • Wonder.Legal. Take your pick of more than 100 legal document templates with Wonder Legal, which you can purchase for a one-time fee.
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