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If you have any questions or would like more information regarding Introducer Agreements, please contact our Commercial Solicitors, who will be happy to assist you.
Introducer agreements are a common type of arrangement used by businesses across a variety of sectors and can play a pivotal part in not only the growth of a business but also in establishing its position in its marketplace.
Whether you are a start-up or a large, established multi-national with a substantial market share, utilising Introducers Agreements can reap benefits for your business.
Whilst the terminology of such arrangements can vary between introducer agreements, finder’s fee agreements, affiliate agreements and referral agreements, the essence of the agreement is generally always the same.
In this blog, our Commercial Solicitors look at introducer agreements in closer detail and consider some of the key points that you should bear in mind before entering into such arrangements.
What is an introducer agreement, and what are the key clauses?
Generally, an introducer agreement sets out the contractual basis on which a referrer will be paid a fee for introducing new clients or customers to the principal business.
Just like any other commercial transaction, it is strongly recommended that a well-drafted introducer agreement is entered into prior to commencing such arrangement as this can help to regulate the relationship between the parties (by clearly defining the responsibilities and obligations of each party), offer protection to both parties and ultimately reduce the risk of disputes arising.
Whilst the commercial terms agreed between the introducer and principal business can largely vary, we have set out some of the key clauses to consider below:
- The definition of ‘Introduction’. As the fees payable will be dependant on the introductions made, this is a common area of dispute, and the definition of introduction should therefore clearly set out what constitutes an ‘introduction’ by the referrer, without any room for ambiguity.
- Payment Terms. The agreement should set out when the introducer is entitled to payment (i.e. whether payment is conditional upon a successful introduction and what constitutes a successful introduction). The type of payment to be made, whether it will be a fixed fee or a commission percentage, is based on the value of any contract entered into as a result of the introduction.
- Exclusivity. The agreement should set out whether the introducer is appointed on an exclusive or non-exclusive basis.
- Authority of the Introducer. The extent of introducers authority and any limits on this should be clearly defined in the agreement (i.e. any geographical restrictions, limitations on entering into contracts on behalf of the business and the offering of any warranties or discounts to prospective customers).
- Data Protection. Data sharing forms a key part of an introducer arrangement, and the agreement should, therefore, require compliance by both parties to the relevant data protection legislation.
- Termination. Regardless of the duration of the agreement, termination rights should be included within the agreement, which provides express termination rights for circumstances such as material breaches and non-payment of fees. The agreement should also cater for the consequences of termination of the agreement.
Here to help
The Commercial Team at Myerson can help to protect your business by advising on, drafting and negotiating Introducer Agreements.
We ensure that they provide an adequate level of protection to your business by ensuring that the agreement is both legally binding and tailored to accurately reflect the arrangement between the parties.