Finder's Fee Agreement Template for the UK
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What is a sourcing fee agreement (finder's fee agreement)?
A sourcing fee agreement (also called a finder's fee or introducer agreement) sets out the payment terms when someone sources or introduces the parties to a successful business deal. It's commonly used in UK mergers and acquisitions, property transactions, and investor introductions to reward intermediaries who bring valuable deal sourcing opportunities to the table.
The agreement specifies key details like the fee amount (usually a percentage of the deal value), payment timing, and the conditions that must be met before anyone signs. Under the law of England and Wales, these contracts need clear terms about who's paying, what triggers the payment, how long the finder's rights last, and how the fee interacts with any due diligence the client carries out on the sourced party. Many regulated sectors, especially financial services, have strict rules about who can receive a sourcing or finder's fee, set out in the Financial Services and Markets Act 2000.
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Sample clauses: standard wording in a UK finder's fee agreement
4. Entitlement to the Finder's Fee
4.1 The Client shall pay the Finder a fee of [3]% of the Transaction Value (the "Finder's Fee") in respect of each Introduced Party where the Finder's introduction was an effective cause of a Qualifying Transaction completing.
4.2 An introduction is made only where the Finder notifies the Client in writing of the identity of the proposed Introduced Party and the Client confirms in writing within [5] Business Days that the party is not already known to it, failing which confirmation the party shall be treated as an Introduced Party.
4.3 The Finder's Fee falls due on completion of the Qualifying Transaction and shall be paid within [30] days of the Client's receipt of the Finder's invoice, together with VAT where properly chargeable.
4.4 Clause 4.1 continues to apply where a Qualifying Transaction with an Introduced Party completes within [12] months after termination of this agreement, but no fee is payable in respect of any transaction completing thereafter.
9. Regulatory Status and Restrictions
9.1 The Finder is not authorised under the Financial Services and Markets Act 2000 and shall not carry on, or purport to carry on, any regulated activity for the purposes of that Act or of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
9.2 The Finder shall not communicate any invitation or inducement to engage in investment activity except where the communication is approved by an authorised person or an exemption under the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 applies.
9.3 The Finder shall not offer, promise or give any financial or other advantage to any person in connection with an introduction where to do so would contravene the Bribery Act 2010, and shall notify the Client promptly of any request for such an advantage.
9.4 Breach of this clause 9 entitles the Client to terminate this agreement with immediate effect by written notice, without liability for any fee not already accrued and due.
Illustrative extract showing typical drafting under the law of England and Wales. Documents generated with GenieAI are tailored to your rules, standards and context.
Frequently Asked Questions
When should you use a sourcing or finder's fee agreement?
Use a sourcing or finder's fee agreement when working with intermediaries who source or connect you to valuable business opportunities. This proves especially important in UK property deals, company acquisitions, or investor fundraising where someone brokers introductions that lead to completed transactions.
Property sourcing is a common trigger. When a sourcer or estate agent introduces you to an off-market building, a rental portfolio, or a development site and helps you secure it, a written agreement records what you'll pay and when. If the sourcer is providing a regulated property sourcing service, check whether they need to be registered with the relevant redress scheme and anti-money-laundering supervisor before you sign.
Get the terms in place before any introductions happen. Doing so protects both sides and prevents disputes about compensation, timing and cost. It matters most in regulated sectors like financial services, where the FCA expects clear documentation of referral arrangements. Clear wording avoids misunderstandings about payment timing, the fee amount, and what counts as a successful, sourced introduction. For a deeper explanation of finder's fees in the UK, and the difference between one-off and ongoing arrangements, keep reading the sections below.
What are the different types of Finder's Fee Agreement?
- Percentage-Based Agreements: Most common in UK property and M&A deals, calculating fees as 1-5% of transaction value
- Fixed-Fee Structures: Set amount paid upon successful introduction, popular in recruitment and smaller deals
- Success-Fee Only: Payment triggered solely by deal completion, common in investment introductions
- Tiered Commission: Scaled fees based on deal size or complexity, used in larger corporate transactions
- Hybrid Arrangements: Combining upfront fees with success-based payments, often used in longer-term finder relationships
Who should typically use a Finder's Fee Agreement?
- Business owners: companies or individuals seeking acquisitions, investment, or strategic partnerships who agree to pay a sourcing or finder's fee
- Professional intermediaries: business brokers, corporate finance advisors, and consultants who source and facilitate introductions
- Investors and funds: parties relying on deal sourcing to find and sign new opportunities
- Property agents: real estate professionals introducing buyers to commercial property opportunities
- Commercial teams: heads of commercial and operations who need the fee terms documented before due diligence begins, without waiting on external advice
How do you write a Finder's Fee Agreement?
- Deal Specifics: Outline the transaction type, potential value, and expected timeline
- Fee Structure: Determine payment terms, percentages, and any performance conditions
- Party Details: Gather full legal names, addresses, and registration numbers of all involved parties
- Service Scope: Define exactly what constitutes a successful introduction or connection
- Duration Terms: Set clear timeframes for the agreement and any exclusivity periods
- Regulatory Check: Confirm FCA requirements for financial service introductions
- Payment Triggers: Specify exactly when and how the fee becomes payable
What should be included in a Finder's Fee Agreement?
- Party identification: full legal names, addresses, registration numbers, and direct contact details (including an email address for notices) of the finder and client
- Services description: precise scope of sourcing and introduction services, plus the success criteria
- Fee structure: clear payment terms, calculation methods, and triggering events
- Duration: start date, end date, and any extension provisions
- Confidentiality and privacy: protection of sensitive business information, contact details, and personal data handled under your privacy policy
- Exclusivity terms: any restrictions on working with competitors
- Terms and conditions for changes: how either party can vary the agreement and how notice of any change must be given
- Governing law: explicit statement that the law of England and Wales applies
- Termination rights: conditions for ending the arrangement and final fee obligations
What's the difference between a Finder's Fee Agreement and an Agency Agreement?
A Finder's Fee Agreement differs significantly from a Agency Agreement in several key aspects, though both involve intermediary relationships. Understanding these distinctions helps choose the right agreement for your situation.
- Scope of Authority: Finder's Fee Agreements only cover introductions and matchmaking, while Agency Agreements grant broader powers to negotiate and act on behalf of the principal
- Legal Relationship: Finders are independent introducers with no authority to bind parties, whereas agents can create legal obligations for their principals
- Payment Structure: Finder's fees typically involve one-off payments for successful introductions, while agency relationships often include ongoing commissions or retainer fees
- Regulatory Requirements: Agency relationships face stricter regulatory oversight and fiduciary duties under English law, particularly in regulated sectors
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About the Finder's Fee Agreement
- Deal Specifics: Outline the transaction type, potential value, and expected timeline
- Fee Structure: Determine payment terms, percentages, and any performance conditions
- Party Details: Gather full legal names, addresses, and registration numbers of all involved parties
- Service Scope: Define exactly what constitutes a successful introduction or connection
- Duration Terms: Set clear timeframes for the agreement and any exclusivity periods
- Regulatory Check: Confirm FCA requirements for financial service introductions
- Payment Triggers: Specify exactly when and how the fee becomes payable
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