Is a Referral Agreement subject to the Bribery Act 2010?

Yes. The Bribery Act 2010 is one of the strictest anti-corruption laws in the world and applies to all businesses carrying on operations in the United Kingdom. A Referral Agreement must be structured to ensure that referral fees are legitimate commercial payments and do not constitute bribes. Under section 6 of the Act, it is an offence to bribe a foreign public official. Under sections 1 and 2, it is an offence to offer or accept a bribe in the context of a business function. Section 7 creates a corporate offence of failing to prevent bribery by an associated person (which can include a referral partner). To avoid liability, the company should ensure that referral fees are transparent, properly documented, proportionate to the services provided, and consistent with applicable industry regulations. The company should also have in place ‘adequate procedures’ (as defined in the Ministry of Justice guidance under section 9 of the Act) to prevent bribery, including due diligence on referral partners.

Does a Referral Agreement require FCA authorisation?

It depends on the nature of the services being referred. If the services being introduced are regulated financial services — such as insurance, mortgages, investments, or consumer credit — the referral arrangement may require authorisation or registration with the Financial Conduct Authority (FCA) under the Financial Services and Markets Act 2000 (FSMA 2000). Introducing clients to regulated firms in exchange for payment can constitute a ‘regulated activity’, and carrying on regulated activities without FCA authorisation is a criminal offence under section 23 of FSMA 2000. However, where the referred services are not regulated (e.g., general commercial services, software, or professional services not regulated by the FCA), FCA authorisation is generally not required for the referral activity itself. If in doubt, legal advice should be sought before entering into a referral arrangement involving financial services.

Can a non-solicitation clause in a Referral Agreement be enforced under English law?

A post-termination non-solicitation clause in a Referral Agreement is a form of restraint of trade and will only be enforceable under English law if it protects a legitimate business interest and is reasonable in scope and duration. English courts apply the common law doctrine of restraint of trade, which requires that any restriction must go no further than is reasonably necessary to protect the employer’s or principal’s legitimate interests. For non-solicitation clauses in referral agreements, the legitimate interest is typically the protection of the company’s client relationships that the referrer had access to through the agreement. Courts generally consider restrictions of up to 12 months in duration to be potentially reasonable, depending on the nature of the business and the referrer’s level of contact with clients. Overly broad or lengthy restrictions risk being struck down entirely or ‘blue-pencilled’ by a court, which may sever the offending part of the clause while leaving the remainder intact.

What happens to referral fees if the referred client later cancels their contract?

The agreement should clearly state whether the referral fee is payable on signing of the client contract or only once the company has received cleared funds. If the agreement specifies that the fee is payable only on receipt of cleared funds, a subsequent cancellation or refund by the client would mean the fee had not yet been earned. If the fee was already paid on contract signing and the client later cancels and receives a refund, the agreement should address whether the referral fee is subject to a claw-back provision. Without a clear claw-back clause, the company would generally have no right to recover a fee already paid. It is therefore advisable to include a claw-back or clawback mechanism in the agreement, particularly where the referred services are of high value or where there is a material risk of early cancellation.

Does the Consumer Rights Act 2015 apply to a Referral Agreement?

The Consumer Rights Act 2015 (CRA 2015) applies to contracts between a business and a consumer. If the Referrer is an individual acting outside their trade or profession, and the Company is a business, the CRA 2015 may apply to the referral agreement itself and impose restrictions on unfair contract terms (Part 2 of the Act). Terms that create a significant imbalance in the parties’ rights and obligations to the detriment of the consumer may be unenforceable. However, in most commercial referral arrangements, both parties are businesses, and the CRA 2015 does not apply. Where the Referrer is a consumer, legal advice should be sought to ensure the agreement complies with the CRA 2015 and does not contain terms that could be challenged as unfair.

Referral Agreement (UK) — United States

Create a legally binding Referral Agreement for England and Wales. This template covers referral fees, territory, exclusivity, non-solicitation, Bribery Act 2010 compliance, data protection, and governing law. Suitable for businesses appointing referral partners to introduce new clients in return for a fixed fee or commission.

What Is a Referral Agreement (UK)?

A Referral Agreement is a legally binding contract used in England and Wales under which one party (the Referrer) agrees to introduce prospective clients or customers to another party (the Company) in exchange for a referral fee. The fee may be structured as a fixed sum payable per successful introduction, or as a percentage of the value of any contract concluded with the referred client.

Referral arrangements are a common and legitimate form of business development used across a wide range of industries, from professional services and technology to financial services and real estate. They allow businesses to expand their client base through trusted intermediaries without the overhead of a full-time sales force. When properly documented, a referral agreement provides clarity on the fee structure, the conditions for payment, the territory within which referrals may be made, and the obligations each party owes to the other.

In England and Wales, a Referral Agreement is primarily governed by the general law of contract as codified and developed by the courts. There is no single statute that specifically regulates non-financial referral agreements, but several statutory regimes are relevant. The Bribery Act 2010 imposes strict obligations on businesses and their associated persons — including referral partners — to avoid corrupt payments. The UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018 regulate the processing of personal data shared between the parties. Where referred services are regulated by the Financial Conduct Authority (FCA), additional rules under the Financial Services and Markets Act 2000 (FSMA 2000) may apply.

Our UK Referral Agreement template is drafted for use by businesses and individuals operating in England and Wales. It provides a comprehensive framework covering the appointment of the Referrer, the fee structure, payment terms, exclusivity, non-solicitation restrictions, confidentiality, data protection, and governing law.

When Do You Need a Referral Agreement (UK)?

A formal Referral Agreement should be put in place whenever a business wishes to compensate a third party for introducing new clients or customers. Using an informal arrangement, or simply proceeding on the basis of an oral understanding, creates significant legal and commercial risk: disputes may arise about whether a referral was the effective cause of a new client relationship, whether a fee is payable, and on what terms.

Common situations in which a UK Referral Agreement is needed include: a professional services firm (such as an accountancy practice or law firm) agreeing to refer clients to a complementary business (such as a financial planner or technology provider) in exchange for a reciprocal or financial arrangement; a technology company appointing a network of partners to introduce potential customers for its software products in exchange for a commission; a recruitment agency referring candidates or clients to a specialist agency in exchange for a fee-sharing arrangement; and a commercial landlord or estate agent agreeing to refer tenants or buyers to a solicitor, surveyor, or mortgage broker.

A Referral Agreement is also important for compliance purposes. The Bribery Act 2010 applies to all persons and companies carrying on business in the United Kingdom and creates offences of offering, promising, or giving a financial or other advantage to induce improper conduct. A well-drafted referral agreement, with appropriate anti-bribery provisions, helps to demonstrate that referral fees are legitimate commercial payments made in return for genuine services, rather than corrupt payments.

Where the referred services involve regulated financial services — such as insurance products, mortgages, investments, or consumer credit — the referral arrangement may require FCA authorisation or exemption. In such cases, specialist legal advice should be obtained before entering into the agreement.

A Referral Agreement is not appropriate where the referrer is intended to act as the company's agent with authority to negotiate or conclude contracts on the company's behalf. In that case, a Commercial Agency Agreement — which is subject to the Commercial Agents (Council Directive) Regulations 1993 — would be more appropriate.

What to Include in Your Referral Agreement (UK)

A well-drafted Referral Agreement for use in England and Wales should contain several key provisions to protect the interests of both parties and ensure legal compliance.

The appointment clause establishes the relationship between the Company and the Referrer. It should make clear that the Referrer is appointed as an independent contractor and not as an employee, worker, or agent of the Company. This distinction is important for tax purposes (the Referrer will be responsible for their own income tax and National Insurance) and to ensure the Referrer does not have authority to bind the Company contractually.

The description of services or products clause identifies the specific goods or services for which the Referrer will make introductions. A precise description helps to avoid disputes about whether a particular client introduction falls within the scope of the agreement.

The territory clause defines the geographical area within which the Referrer may make introductions. If the Company operates in a limited area, the territory should be restricted accordingly.

The referral fee clause is the most commercially significant provision. It should specify: (a) whether the fee is a fixed sum or a percentage of the contract value; (b) the precise amount or percentage; (c) when the fee becomes payable (e.g., on contract signature, on receipt of cleared funds, or after a specified period); and (d) the payment method and currency (GBP).

The conditions for payment clause defines what constitutes a ‘successful’ referral. Typically, a referral is successful when the Introduced Client enters into a binding contract with the Company and the Company receives cleared funds. The clause should also address what happens to fees if a client cancels early or fails to pay.

The exclusivity clause, if included, prevents the Company from appointing other referrers within the territory. Exclusivity imposes a greater obligation on the Referrer to actively promote the Company’s services, and the clause should reflect this.

The non-solicitation clause restricts the Referrer from soliciting the Company’s clients or employees after termination. Under English law, this must be reasonable in scope and duration to be enforceable as a restraint of trade.

The Bribery Act 2010 compliance clause is essential in any UK commercial agreement involving payments to third parties. It should require the Referrer to have adequate anti-bribery procedures in place and prohibit the payment of any advantage to improperly influence business decisions.

The data protection clause ensures compliance with the UK GDPR and the Data Protection Act 2018, particularly where the Referrer shares the personal data of prospective clients with the Company.

The governing law and jurisdiction clause should specify England and Wales.

What Is a Referral Agreement (UK)?

When Do You Need a Referral Agreement (UK)?

What to Include in Your Referral Agreement (UK)

Frequently Asked Questions

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