A party to this agreement may refer customers to the other party in return for commission payments by the other party.
There may be restraints imposed on the referral rights. For instance, the referring party’s rights to sell the other party’s services may be restricted to specific countries. Also, referrals may be restricted by reference to the kinds of services to be provided by the party who accepts the referrals.
The agreement assumes that parties operate some kind of register to track referrals. The fundamental principle is that the commission is paid only with regards to clients that are attributed to the appropriate party in this tracking register. No commission will be paid if a customer is assigned in the referral tracking register to another person at the time of the referral.
In a case where the commission fees are payable with respect to the provision of physical goods, this agreement should not be used. Similarly, it should not be used with regards to relationships subjected to the law of agency.