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Finder Fees Agreement – mOVE 360

Finder Fees Agreement

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When it comes to finding specialized services or products, it’s become increasingly common for businesses to enlist the help of a third-party consultant or broker to find the right fit. Whether it’s a recruitment agency finding new hires, a financial consultant sourcing investment opportunities, or a real estate agent finding properties, these experts often charge finder fees for their services.

But what exactly is a finder fee, and how can you ensure that your finder fees agreement is fair and legally sound? Let’s dive in.

What is a finder fee agreement?

A finder fee agreement is a legal contract between a business and a third-party consultant or broker that outlines the terms of the finder’s services. This agreement typically includes the following details:

– The scope of the finder’s services, including the types of products or services they will be sourcing and the geographic area in which they will be looking.

– The fee structure, including how much the finder will be paid and when payment is due (e.g. a percentage of the total deal value, a flat fee for each successful referral, etc.).

– The responsibilities of each party, such as who is responsible for negotiating contracts and closing deals.

– The duration of the agreement, including any renewal or termination provisions.

Why use a finder fee agreement?

Using a finder fee agreement can be beneficial for both parties involved. For businesses, it allows them to tap into specialized expertise and easily find new opportunities without having to invest in the time and resources required for sourcing and screening candidates or deals on their own.

For finders, it provides a clear understanding of their role and compensation, as well as protection against disputes or non-payment. Additionally, a finder fee agreement can help establish a professional reputation and build relationships with clients, leading to potential repeat business.

How to ensure your finder fee agreement is legally sound

To ensure your finder fee agreement is legally sound, it’s important to consult with a lawyer who specializes in this area and to include the following elements:

– Clearly state the purpose and scope of the agreement in the opening clause.

– Use clear and concise language throughout the document.

– Specify the payment terms in detail, including the agreed-upon fee structure and payment schedule.

– Include a clause that states the finder is an independent contractor, not an employee of the business.

– Include a clause that defines the jurisdiction and venue of any potential disputes, as well as how they will be resolved (e.g. through mediation, arbitration, or litigation).

– Include a confidentiality clause that prevents the finder from sharing any sensitive business information.

By following these guidelines and working with a legal expert, you can create a legally binding and mutually beneficial finder fee agreement that protects both your business and your finder.

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