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Referral Agreement
I need a referral agreement for a business partnership where the referrer will receive a 10% commission on successful sales generated through their referrals. The agreement should include terms for payment schedules, confidentiality, and a termination clause with a 30-day notice period.
What is a Referral Agreement?
A Referral Agreement sets out the terms when one party (the referrer) directs potential clients or business opportunities to another party in exchange for compensation. In Malaysia, these contracts commonly appear in real estate, financial services, and professional consulting, where agents earn commissions for successful introductions.
The agreement must clearly state the referral fees or commission structure, specify what qualifies as a valid referral, and outline payment terms - all while complying with Malaysian industry regulations like the Capital Markets and Services Act for financial referrals. It should also address confidentiality requirements and define how long the referrer can claim compensation after making an introduction.
When should you use a Referral Agreement?
Use a Referral Agreement when your business wants to formalize partnerships with individuals or companies who can bring you new customers or opportunities. This is especially vital in Malaysian industries like property development, insurance, and financial services, where referral networks drive significant business growth and require clear documentation of commission structures.
The agreement becomes essential when dealing with high-value referrals or ongoing partnerships where compensation needs tracking. For example, real estate agencies need these agreements to manage agent networks, while financial advisors use them to document client introductions in compliance with Bank Negara Malaysia's guidelines on third-party arrangements.
What are the different types of Referral Agreement?
- Agent Referral Agreement: Standard template for real estate and insurance agents, outlining commission structures and referral tracking systems
- Marketing Referral Agreement: Focuses on digital marketing partnerships, including social media influencers and content creators
- Finders Fee Contract: One-time payment structure for introducing business opportunities or investors
- Car Referral Fee Agreement: Specialized for automotive dealerships and sales networks
- Finder Fee Agreement For Sales Leads: Detailed structure for B2B lead generation and sales partnerships
Who should typically use a Referral Agreement?
- Real Estate Agents: Both individual agents and agencies use Referral Agreements to manage commission sharing when passing leads to other property professionals
- Financial Advisors: Licensed professionals who refer clients to specific investment products or services under Bank Negara Malaysia regulations
- Business Consultants: Independent professionals who connect clients with specialized service providers for a fee
- Insurance Brokers: Licensed intermediaries who refer clients to insurance companies while maintaining compliance with Malaysian insurance laws
- Corporate Legal Teams: In-house lawyers who draft and review these agreements to ensure compliance with industry regulations and protect company interests
How do you write a Referral Agreement?
- Party Details: Gather full legal names, business registration numbers, and contact information for all parties involved
- Referral Terms: Define exactly what constitutes a valid referral and how referrals will be tracked
- Commission Structure: Calculate and document precise payment amounts, percentages, or tiered systems
- Payment Timeline: Specify when and how payments will be made, including any conditions or milestones
- Industry Compliance: Check relevant Malaysian regulatory requirements, especially for financial services or real estate
- Documentation Method: Use our platform to generate a legally-sound agreement that includes all mandatory elements and meets local requirements
What should be included in a Referral Agreement?
- Party Identification: Full legal names, registration numbers, and authorized representatives of both referrer and recipient
- Scope Definition: Clear description of referral services and qualifying criteria under Malaysian contract law
- Compensation Terms: Detailed commission structure, payment schedules, and conditions for payment
- Confidentiality: Protection of business information and client data under PDPA 2010 requirements
- Duration & Termination: Agreement period, renewal terms, and conditions for ending the relationship
- Governing Law: Explicit statement of Malaysian law jurisdiction and dispute resolution procedures
- Non-Compete Provisions: Reasonable restrictions on competitive activities during and after the agreement
What's the difference between a Referral Agreement and an Affiliate Agreement?
A Referral Agreement differs significantly from an Affiliate Agreement, though both involve business partnerships. While they may seem similar at first glance, understanding their key differences helps choose the right agreement for your situation in Malaysia's business landscape.
- Payment Structure: Referral Agreements typically involve one-time payments for specific introductions, while Affiliate Agreements usually offer ongoing commissions for continuous sales or traffic
- Relationship Duration: Referral arrangements often end after the introduction is made and commission paid, whereas affiliate relationships are designed for long-term partnerships
- Marketing Rights: Affiliates generally have broader rights to use company branding and marketing materials, while referrers usually have limited promotional authority
- Legal Obligations: Referral Agreements focus on the introduction process and commission terms, while Affiliate Agreements include detailed marketing guidelines and compliance requirements under Malaysian e-commerce laws
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