Referral Agreement Template for Pakistan

A Referral Agreement sets up a formal partnership where one party gets rewarded for directing clients or customers to another business. In Pakistan's business landscape, these agreements help companies expand their reach while following the Competition Act's rules on business partnerships and referral fees.

The agreement spells out how referral fees or commissions work, what each party must do, and important details like payment timing and confidentiality rules. Common in sectors like real estate, financial services, and healthcare, these contracts need to comply with Pakistani tax laws and the Securities and Exchange Commission's guidelines on business relationships.

Use a Referral Agreement when partnering with other businesses or professionals to expand your client base in Pakistan. This is especially important for service providers like real estate agents, financial advisors, and healthcare professionals who want to create mutually beneficial referral networks while staying compliant with SECP regulations.

The agreement becomes essential when your business relies on partnerships to generate leads or when offering finder's fees for new clients. It protects both parties by clearly defining commission structures, payment terms, and confidentiality requirements. Pakistani tax laws require proper documentation of referral income, making these agreements crucial for maintaining transparent business relationships.

• One-Way Referral Agreements: Most common in Pakistan, where one party pays commissions to another for client referrals, typically used in real estate and financial services
• Mutual Referral Networks: Both parties refer clients to each other, often seen among medical specialists and legal professionals
• Fixed-Fee Agreements: Set flat rates for successful referrals, popular in IT and consulting sectors
• Commission-Based Structure: Percentage-based rewards common in insurance and investment industries
• Exclusive Referral Partnerships: Limited to specific geographic areas or client types, with higher commission rates but restricted partner options

• Business Owners: Establish referral networks and set commission structures for partner relationships
• Real Estate Agents: Create partnerships with property developers, mortgage brokers, and other agents for client referrals
• Financial Advisors: Form networks with banks, insurance companies, and investment firms to expand client reach
• Legal Professionals: Draft and review agreements to ensure compliance with Pakistani business laws
• Healthcare Providers: Set up referral systems with specialists, diagnostic centers, and hospitals
• Marketing Agencies: Partner with complementary service providers for mutual client recommendations

• Basic Details: Gather full legal names, business addresses, and registration numbers of all parties involved
• Referral Terms: Define specific services or products covered, territory limits, and exclusivity requirements
• Commission Structure: Determine payment rates, calculation methods, and payout schedules
• Performance Metrics: Set clear goals, tracking methods, and reporting requirements
• Legal Requirements: Check SECP regulations and tax implications for referral income
• Confidentiality Terms: Outline data protection measures and client information handling
• Duration and Termination: Specify agreement length and conditions for ending the partnership

• Party Information: Complete legal names, addresses, and business registration details of both referrer and referee
• Scope Definition: Clear description of referral services, territories, and any exclusivity terms
• Commission Terms: Detailed payment structure, calculation methods, and payment schedules
• Confidentiality Clause: Data protection measures aligned with Pakistan's privacy laws
• Term and Termination: Agreement duration, renewal options, and termination conditions
• Governing Law: Explicit reference to Pakistani law and jurisdiction
• Non-Compete Provisions: Restrictions on competitive activities during and after the agreement
• Dispute Resolution: Clear procedures for handling disagreements under local law

A Referral Agreement differs significantly from an Agency Agreement in several key aspects under Pakistani law. While both involve business relationships, their scope and legal implications vary considerably.

• Legal Authority: Agency Agreements grant the agent power to act on behalf of the principal, while Referral Agreements only permit introducing potential clients without negotiation authority
• Liability Scope: Agents can legally bind their principals, but referrers bear no liability for client transactions
• Compensation Structure: Agency Agreements typically involve ongoing commission structures, while Referral Agreements usually offer one-time fees per successful referral
• Regulatory Requirements: Agency relationships face stricter SECP oversight and fiduciary obligations compared to simpler referral arrangements
• Duration: Agency Agreements generally establish long-term relationships, whereas Referral Agreements can be project-specific or short-term