A referral agreement, also known as a referral fee agreement, is a legal document that defines the terms and conditions of a referral relationship between two parties. In Hong Kong, a referral agreement is a common practice for businesses that want to expand their network and generate new leads. In this article, we will discuss the key components of a referral agreement in Hong Kong.
The referral agreement should clearly state the parties involved in the agreement. This includes the company that is seeking referrals (the “referring party”) and the individual or company that will provide the referrals (the “receiving party”). The agreement should also include the contact information of both parties.
One of the most important components of a referral agreement is the referral fee. This is the amount of compensation that the referring party will receive for each successful referral. The referral fee can be a percentage of the revenue generated from the referral, a fixed amount, or a combination of the two. It is important to specify the referral fee in the agreement to avoid any confusion or disputes in the future.
Scope and Duration
The referral agreement should also specify the scope and duration of the agreement. This includes the types of referrals that the receiving party will provide, the geographic area of the referrals, and the duration of the agreement. It is important to define the scope and duration of the agreement to ensure that both parties are clear on their responsibilities and obligations.
The referral agreement should also include provisions for termination. This includes the circumstances under which either party can terminate the agreement, the notice period required for termination, and any penalties for breach of the agreement. It is important to include termination provisions to ensure that both parties can exit the agreement if necessary.
Confidentiality and Non-Disclosure
Lastly, the referral agreement should include provisions for confidentiality and non-disclosure. This includes the protection of confidential information shared between the parties, the non-disclosure of the referral relationship, and the non-solicitation of clients or customers. It is important to include these provisions to protect the interests of both parties and ensure that confidential information is not shared.
In conclusion, a referral agreement is an important document for businesses in Hong Kong that want to establish a referral relationship with other companies or individuals. By including the key components discussed in this article, businesses can ensure that the referral agreement is clear, concise, and legally binding.