Use this finder’s fee agreement to engage a finder to source potential clients for you. Ensure that your finder's fee agreement is recorded in a formal, legally binding contract.
What is a finder's fee agreement?
A finder’s fee agreement is a contract between two parties, under which the first party (known as the ‘principal’) appoints a finder to find and refer potential leads (also known as ‘client leads’), such as new clients or employees, to the principal in return for a fee. Recording the arrangement in writing helps ensure that the interests of both parties are laid out in certain terms. A finder's fee agreement can also help in the face of future disagreement and prevent any alleged uncertainty.
When should I use a finder's fee agreement?
Use this agreement if:
you are a business providing services to your clients or customers
you want to engage a finder to refer potential clients to you
What is included in a finder's fee agreement?
This agreement covers:
basis of appointment of the finder (on an exclusive or non-exclusive basis)
obligations of both parties
fees payable and the payment process
liability and insurance
ending the agreement
Do I need a finder's fee agreement?
You need a finder’s fee agreement when you want to engage a finder to refer potential leads to your business, on an exclusive or non-exclusive basis.
How should the finder be paid?
It will be up to the parties to decide how the finder is to be paid. They may, for example, decide that the finder will receive a fixed fee per converted client lead, a commission on income received by the principal, or a combination of both.
While it is up to the parties to decide on the specifics, it is important that the agreement clearly sets out how the finder’s fee will be calculated.
Is there a minimum fee or commission rate that the finder must be paid?
Generally, there is no minimum fee or commission rate that the finder must be paid. Whatever you decide to specify as the minimum fee or commission rate will depend on the competitiveness of the industry that you are operating in.
What is the difference between an exclusive and non-exclusive appointment?
Where a finder is appointed on an exclusive basis, the finder has exclusive rights to search for, and introduce to the principal, client leads in the territory specified in the agreement. Under an exclusive appointment, the principal also agrees not to appoint any other finders in the territory.
Where a finder is appointed on a non-exclusive basis, the principal can appoint other finders in the territory and the finder will need to compete with others when looking for client leads.
What is the territory?
The territory is the geographical area the finder is appointed and authorised to operate in.
What restrictions can be placed on the finder?
Under this finder’s fee agreement, the principal can restrict the finder from providing services similar to making introductions to businesses similar to the principal. This restriction applies only to the finder making introductions in the territory the principal appointed them to operate in. Such a restriction will apply for the course of the agreement and a specified period after its end.
Do I need an anti-bribery policy?
In the UK it is illegal to offer, promise, give, request, agree, receive or accept bribes. Having an anti-bribery policy in place can protect your company especially if there is a risk that someone who works for you or on your behalf might be exposed to bribery. If such an anti-bribery policy is in place, it should be attached to the finder’s fee agreement in Schedule 3.
For more information, read Workplace anti-bribery rules.
How can the agreement be terminated?
The finder’s fee agreement can be brought to an end by giving notice of termination. This agreement allows you to specify the amount of advance notice (ie the number of days, weeks or months) that is required to bring the agreement to an end.
This agreement can also be terminated:
when either party commits a material breach of the agreement and fails to remedy it within a specified period of time, or
when either party is dissolved or is at risk of bankruptcy.
Ask a lawyer if:
the document doesn't meet your needs or cover what you want
you are based in Scotland
you provide goods to your clients or customers
This finder's fee agreement is governed by the laws of England and Wales.