Commission Agreement UK: Introducer & Finder Fee Guide

What this document is

A Commission Agreement is a commercial contract between a Supplier of goods or services and an Introducer who agrees to refer potential customers in return for payment. The Introducer does not sell anything directly, take ownership of stock, or sign contracts on the Supplier's behalf.

Their job is to make the introduction. The Supplier then decides whether to contract with that prospect and, if a deal is done, pays the agreed commission. This type of arrangement sits somewhere between a pure referral and a full agency relationship, and the distinction matters.

A genuine Introducer-style contract is generally not caught by the Commercial Agents (Council Directive) Regulations 1993, which apply to agents who negotiate or conclude sales of goods on behalf of a principal. Getting the drafting right is what keeps the arrangement on the Introducer side of that line.

A well written Commission Agreement sets out who the parties are, what counts as a qualifying introduction, how commission is calculated and paid, how long the arrangement lasts, and what happens if the Introducer brings the same customer back a year later.

How to use this document

1. Agree the commercial basics first. Before anyone reaches for a draft, the Supplier and Introducer need to be aligned on three things: what qualifies as a valid introduction, how commission is calculated (flat fee, percentage of invoice value, or share of net income), and when it becomes payable. Write these down in plain terms before you start on legal wording.
2. Define the scope and territory clearly. Specify whether the Introducer is working on a named list of prospects, a particular sector, a geographic region, or an open field. Vague scope is the single biggest cause of commission disputes, because both sides end up with a different idea of which customers count.
3. Set the commission mechanics in detail. Describe exactly what triggers payment, whether it applies only to the first contract or to repeat business, how long the tail lasts after introduction, and how commission is handled if the customer pays in instalments, cancels, or refunds. Be explicit about VAT treatment too.
4. Deal with termination and survival. Your agreement should say how either party can end the relationship and, crucially, what happens to commissions already earned or still in the pipeline when it ends. A well drafted clause lets the Introducer earn on introductions already made, while stopping the clock on new ones.
5. Add the protective clauses. Confidentiality, data protection, anti-bribery compliance, and a clear statement that the Introducer has no authority to bind the Supplier are standard. You should also think about exclusivity, non-solicitation, and dispute resolution before finalising.