Finder's fee agreement

Written by michael martin
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Finder's fee agreement
Refer potential customers under a finder's fee agreement. (Group of business people working together in the office. image by Andrey Kiselev from Fotolia.com)

A finder is an individual who enters into a finder's fee agreement with a company for the express purpose of referring potential customers to buy goods or services from the company. The agreement is a binding contract between the parties. It sets out the terms of how the finder shall govern herself during the course of referring business.

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Finder

The finder is generally not an employee or an agent of the company. Rather, the finder is considered an independent contractor of the company for the limited scope of finding business and bringing interested parties together.

Limited Capacity

The finder does not have authority to bind agreements between potential referrals and the company, nor does the finder have authority to negotiate agreements.

Compensation

The agreement specifies the finder's compensation. Most finder's fee agreements offer a percentage of the net sale, which excludes tax, refunds and shipping and handling charges.

Other Provisions

Finder's fee agreements may have a termination clause and a condition that finders shall not disclose confidential or proprietary information about the company during the referral process.

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