Finders Fee Agreement for the United Kingdom

Finders Fee Agreement Template for United States

A Finder's Fee Agreement is a legally binding contract used in the United States that establishes the terms under which a finder will be compensated for successfully introducing parties for business opportunities. The agreement outlines the scope of permitted activities, compensation structure, and conditions for payment, while ensuring compliance with federal and state securities laws, including broker-dealer regulations. It typically includes specific provisions about what constitutes a successful introduction, payment timing, and any exclusivity arrangements, while carefully avoiding language that might trigger broker-dealer registration requirements.

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What is a Finders Fee Agreement?

The Finder's Fee Agreement serves as a critical document for businesses and individuals seeking to formalize arrangements for introducing parties to potential business opportunities. This contract type is particularly important in the United States where securities laws and regulations strictly govern intermediary activities. A well-drafted Finder's Fee Agreement helps prevent future disputes by clearly defining what constitutes a successful introduction, establishing compensation terms, and ensuring compliance with applicable regulations. It's essential to carefully structure these agreements to avoid inadvertently requiring broker-dealer registration under federal or state securities laws, while still protecting the finder's right to compensation for legitimate introductory services.

What sections should be included in a Finders Fee Agreement?

1. Parties: Identification of the party engaging the finder and the finder, including full legal names and addresses

2. Background: Context of the agreement and brief description of why the parties are entering into it

3. Definitions: Key terms used throughout the agreement, including 'Successful Introduction', 'Target', 'Fee', etc.

4. Scope of Services: Detailed description of what the finder is and is not authorized to do

5. Fee Structure: Details of compensation, including amount, calculation method, and payment timing

6. Payment Terms: Conditions for payment, including what constitutes a qualifying introduction

7. Term and Termination: Duration of the agreement and circumstances for termination

8. Representations and Warranties: Basic promises by both parties, including finder's compliance with laws

What sections are optional to include in a Finders Fee Agreement?

1. Exclusivity: Provisions defining whether the finder has exclusive rights to introduce certain targets or clients

2. Regulatory Compliance: Specific regulatory obligations and restrictions applicable to the finder's activities

3. Tail Period: Provisions governing the period after termination during which finder remains entitled to fees

4. Non-Circumvention: Provisions preventing parties from bypassing the finder to avoid paying fees

What schedules should be included in a Finders Fee Agreement?

1. Schedule of Fees: Detailed breakdown of fee calculations and scenarios

2. Target Description: Specific criteria or list of potential targets if applicable

3. Excluded Parties: List of parties excluded from the finder's fee arrangement

4. Required Disclosures: Any mandatory regulatory or legal disclosures required by applicable laws

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Industries

Federal Securities Laws: Securities Exchange Act of 1934 and Securities Act of 1933 must be considered, especially if the finder is connecting parties for investment opportunities. Important focus on SEC regulations regarding broker-dealer registration requirements.

State Securities Laws (Blue Sky Laws): Each state has unique securities regulations, including registration requirements for finders and state-specific disclosure requirements. These state-level regulations operate alongside federal securities laws.

State Licensing Laws: Various state-specific requirements including real estate finder regulations, business opportunity and broker licensing requirements, and restrictions on finder's activities.

Employment Laws: Considerations regarding proper classification of the finder (independent contractor vs. employee) and compliance with Fair Labor Standards Act requirements.

Contract Law: State-specific contract formation requirements, including Statute of Frauds requirements and consideration requirements for valid contract formation.

Anti-Fraud Regulations: Federal Trade Commission regulations and state consumer protection laws that protect against fraudulent practices in business transactions.

Industry-Specific Regulations: Different rules and requirements depending on the specific industry (such as real estate, securities, or business brokerage) in which the finder operates.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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