We’ve been through some of the key clauses you need to include if you’re writing up your own referral agreement. What you’re getting from your agent, how you’re paying them — other money-related stuff — this is all very important, but you also need to include clauses that cover your legal bases as well. Clauses that cover conflict resolution, arbitration, and liability will help you immensely in the long run, and protect you from problems down the line.
Here are six more key questions you should answer and define in your agreement:
1. How will you resolve conflicts if you have multiple referral agreements?
If you have multiple referral agreements in place, be sure to specify how you will resolve a conflict if the situation arises. It’s best to state that you will exercise reasonable efforts to resolve any conflict, and state that your determination is final.
2. How are you protecting your confidential information?
Specify that all confidential information that may be disclosed about your business should be used only to bring in referrals, and not be disclosed without your approval.
3. How will you limit your liability?
Limit your liability to commissions payable. Also make sure that this clauses applies even during the expiration or termination of the agreement.
4. Is there a termination for convenience clause?
This will allow you to terminate the agreement for any reason prior to its expiration.
5. Are commissions payable after termination?
Even if the agreement is terminated or expires, specify that you’ll continue to pay commissions that were earned prior to the end of the agreement.
6. How will you handle arbitration?
Consider arbitration for dispute resolution. It’s usually a good idea to provide an arbitration clause specifying that all disputes will be arbitrated. You probably don’t want to risk the expense of litigation.
And that’s it! This should form a solid legal baseline for your agreement. Combined with our Six Essential Clauses outlined in our last blog post, you’ll have a great agreement.
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Disclaimer: These clauses are not exhaustive and have not been tailored to your specific circumstances. You may need to add additional clauses, and it may be advisable to consult with an attorney before use.