Drafting a Finders Agreement

Note: Links to our free templates are at the bottom of this long guide.
Also note: This is not legal advice

Introduction

When it comes to business transactions, the importance of a Finders Agreement cannot be overstated. This legally binding document outlines the responsibilities of a finder and the compensation they will receive for their services, making sure everyone is clear on their roles - protecting both the interests of the finder and those of the represented business.

A Finders Agreement also ensures that payment is received in a timely fashion and that no misunderstandings arise when it comes to complex transactions. What’s more, it serves as an additional layer of protection for all involved, ensuring that any potential liability is addressed in accordance with the limits outlined in the agreement.

The Genie AI team provides free Finders Agreement templates which help to protect both parties whilst also guaranteeing fair compensation for services rendered - no matter how intricate or large-scale your transaction may be. Our template library contains millions of data points which teach our AI what a market-standard document looks like, allowing anyone to draft and customize high quality legal documents without needing to pay a professional lawyer.

With all this in mind, it’s important to take your time and draft an agreement that is comprehensive yet tailored - taking into account any specifics you may have concerning your particular transaction or situation. A professionally drafted Finders Agreement can provide peace of mind in knowing not just that payments will be made on time but also because you are protected from any potential liability - leaving you free to focus on conducting your business safely and legally with confidence.

For step-by-step guidance on drafting a Finders Agreement or accessing our template library today, please read on below!

Definitions

Parties: People or entities involved in an agreement.
Scope: The range of activities, topics, or responsibilities covered by an agreement.
Fee: The cost of a service or product.
Timeline: A schedule of when certain events or tasks should be completed.
Payment methods: The ways in which payments can be made.
Agreement: A legal document outlining the rights, responsibilities, and obligations of two or more parties.
Confidentiality: Keeping information private or secret.
Non-disclosure agreement: A legal agreement between two or more parties in which they agree to keep certain information confidential.
Jurisdiction: The geographical area in which a legal agreement applies.
Governing law: The set of laws that apply to a jurisdiction.
Dispute resolution: The process of resolving a disagreement between two or more parties.
Termination: The end of a legal agreement.
Rights: Legal entitlements or privileges.
Responsibilities: Legal obligations or duties.

Contents

1. Definitions of the parties involved in the agreement and the scope of their roles
2. Identifying who the parties are
3. Defining the roles and responsibilities of each party
4. Outlining the services that the finder will provide
5. Defining the services to be provided
6. Defining the timeline for the completion of services
7. Negotiating the fee structure for the finder
8. Determining the fee for the finder’s services
9. Discussing any additional fees or costs
10. Detailing the payment methods for the finder
11. Discussing the payment schedule
12. Defining the payment methods
13. Drafting and executing the agreement
14. Writing the agreement
15. Securing signatures from both parties
16. Discussing the legal implications of the agreement
17. Explaining the legal obligations of the parties involved
18. Discussing the legal consequences of breach of contract
19. Addressing confidentiality and non-disclosure agreements
20. Defining the confidential information to be kept private
21. Including a non-disclosure agreement if necessary
22. Clarifying the jurisdiction and governing law of the agreement
23. Determining the applicable law for the agreement
24. Determining the applicable jurisdiction for the agreement
25. Discussing dispute resolution and termination provisions
26. Explaining the process for resolving disputes
27. Determining the conditions for terminating the agreement
28. Determining the mutual rights and responsibilities of the parties involved
29. Writing out the rights and responsibilities of each party
30. Establishing enforcement mechanisms for the rights and responsibilities

Get started

Definitions of the parties involved in the agreement and the scope of their roles

• Identify the parties to the finder’s agreement: who is the “finder” and who is the “contractor”?
• Define the scope of the finder’s role: what services will the finder provide, and what are the limitations of the finder’s role?
• Make sure that the roles and responsibilities of each party are clear, including any applicable restrictions or limitations.
• Describe the process for the payment of the finder’s fee, and any terms and conditions related to payment.
• Include any other relevant information related to the parties and the finder’s agreement.

You’ll know when you can check this off your list and move on to the next step when you have defined the parties involved in the agreement and the scope of their roles.

Identifying who the parties are

• Identify all parties involved in the agreement and document their contact information, such as their name, address, telephone number, and email address.
• Make sure to include a clear description of the roles each party plays in the agreement and how they are related.
• If the relationship between the parties is not spelled out in the agreement, be sure to include a clause that explicitly defines their relationship.
• When you have identified all parties involved in the agreement and documented their contact information, and have also included a clause that defines their relationship, you can check this step off your list and move on to the next step.

Defining the roles and responsibilities of each party

• Outline the roles and responsibilities each party will have in the agreement
• Describe the services the finder will provide
• Specify the obligations of each party
• Clarify any information or documents that need to be exchanged
• Note any other relevant details

Once you have outlined the roles and responsibilities of each party, you can move on to the next step.

Outlining the services that the finder will provide

• Identify the services that the finder will provide
• Clarify the scope of services the finder will be responsible for
• Include any additional services that the finder may need to provide
• Outline any limitations to the finder’s services
• Specify any fee structure or commission that the finder will receive
• Describe any additional compensation required for the finder
• Include any applicable terms and conditions
• Finalize the agreement by having both parties sign

When you’ve completed these steps, you can move on to the next step in the guide which is Defining the services to be provided.

Defining the services to be provided

• Clearly state the specific services to be provided by the finder
• Specify the scope of the services to be provided, such as the types of contacts to be made
• Include a list of deliverables that the finder is expected to provide
• Outline the responsibilities of the finder in providing the services
• Specify how the finder will be compensated for their services
• Outline any confidentiality considerations or non-disclosure requirements
• When all of these items have been determined and agreed upon, the finder and the recipient can sign off on the agreement to formally complete the process.

Defining the timeline for the completion of services

• Establish a timeline for the completion of all services to be provided by the finder.
• Consider deadlines for any milestones or deliverables that the finder is responsible for.
• Decide when the finder will be paid and if there are any bonuses or incentives that may be offered for early completion.
• Agree on a timeline for the services and have the finder sign off on it.
• You can check this step off your list when both parties have agreed on a timeline for the completion of services.

Negotiating the fee structure for the finder

• Make sure to agree on a fee structure that is fair for both parties and that reflects the services that the finder will provide
• Consider the costs associated with the service, the amount of time and effort the finder will need to expend, and the potential for the finder to make a profit
• Discuss how the fee will be paid and when it will be paid
• Clarify what expenses the finder will incur and who will be responsible for them
• Make sure to document the agreed-upon fee structure in the finder’s agreement
• Once the fee structure is negotiated and agreed upon, both parties can move on to determining the fee for the finder’s services in the next step.

Determining the fee for the finder’s services

• Discuss the fee structure with the finder and agree on a fee that is fair and reasonable for both parties
• Confirm the fee in writing in the agreement
• Ensure that the fee is within the limits of any applicable laws
• Make sure that the agreement is legally binding
• When the fee structure is agreed upon and documented in the agreement, you can check this step off your list and move on to discussing any additional fees or costs.

Discussing any additional fees or costs

• Establish if any other fees or costs will be payable to the finder in addition to the fee for the finder’s services.
• Determine any additional fees or costs that the finder will incur in connection with services they provide, such as reimbursable expenses.
• Outline who is responsible for the additional fees or costs.
• Include these fees or costs in the agreement.
• When you have discussed and included any additional fees or costs, you can check this off your list and move on to the next step.

Detailing the payment methods for the finder

• Establish a clear payment method for the finder, such as a fixed sum, commission or a combination of the two
• Agree on the currency, payment method and payment timing
• Decide if the finder will be paid in advance or after the deal closes
• Determine if the finder’s payment is contingent on the deal closing
• Consider any taxes or legal requirements related to the payment
• Include all the agreed-upon payment details in the finders agreement

You’ll know when you can check this off your list and move on to the next step when all the payment details have been agreed upon and included in the finders agreement.

Discussing the payment schedule

• Outline the payment schedule, including when and how the finder will be paid
• Confirm the payment schedule with the finder and receiver
• Document the payment schedule in the finders agreement
• Once the payment schedule has been agreed to and documented, you can check this step off the list and move on to defining the payment methods

Defining the payment methods

• Discuss the payment method(s) that will be used - cash, check, wire transfer, etc.
• Ensure that the payment method(s) are mutually agreed upon and are appropriate for the situation.
• Document the payment method(s) in the Finders Agreement.

Once the payment method(s) have been discussed and documented in the Finders Agreement, this step is complete and can be checked off the list.

Drafting and executing the agreement

• Research applicable laws and regulations in the jurisdiction where the Finder will be working to ensure compliance
• Draft an agreement outlining the Finder’s role, expectations, and payment methods
• Obtain legal counsel to review the agreement
• Have both parties sign the agreement
• File a copy of the agreement with the appropriate government agency
• Once all parties have signed and filed the agreement, the Finder can begin their work
• You’ll know when the agreement has been completed when both parties have signed, the agreement has been filed, and the Finder is actively working.

Writing the agreement

• Start by clearly defining the parties involved in the agreement, their roles and responsibilities.
• Outline the terms of the agreement, including the scope of the Finder’s services, the compensation that will be paid, the timeline for payment, the length of the agreement, and any other details that are relevant.
• Make sure to include a clause that outlines how disputes or disagreements between the parties will be resolved.
• Once the agreement is written, have both parties review it, and make any necessary changes or clarifications.

Once the agreement is written and both parties have agreed to the terms, you can check this off your list and move on to the next step of securing signatures from both parties.

Securing signatures from both parties

• Make sure both parties have reviewed and are in agreement with the terms of the Finders Agreement
• Have both parties sign the agreement in the presence of witnesses
• Obtain the witnesses’ signatures to signify the agreement was signed in their presence
• Check to make sure all parties have signed the agreement
• Ensure both parties retain a copy of the signed Finders Agreement
• Once all parties have signed the Finders Agreement and all signatures are in place, the Finders Agreement is legally binding and enforceable in a court of law
• You can check this off your list once all parties have signed the agreement and all signatures are in place.

Discussing the legal implications of the agreement

• Research the applicable state and federal laws relevant to the agreement.
• Meet with both parties to discuss the legal implications of the agreement, such as the rights and obligations of each party, any damages that may result, and any applicable legal remedies.
• Draft the agreement with language that is clear and concise.
• Make sure both parties are in agreement and understand the legal implications of the agreement before signing.

Once you have discussed the legal implications of the agreement with both parties, have them sign the agreement, and you have confirmed that they understand the legal implications, you can check this step off your list and move on to the next step.

Explaining the legal obligations of the parties involved

• Review the agreement to ensure that it accurately reflects the obligations of each party
• Ensure that each party is aware of their obligations and the consequences if they fail to fulfill them
• Specify which party is responsible for the performance of each obligation
• Describe how the agreement may be terminated and any associated conditions
• Identify any consequences that may arise from breach of the agreement
• Explain any remedies available to the parties in the event of a breach
• Once the legal obligations of the parties have been identified and explained, the agreement is ready to be signed by both parties and the finder’s fee should be paid.

Discussing the legal consequences of breach of contract

• Discuss potential consequences if either party fails to fulfill their obligations.
• Create specific ways to measure if a party has breached their obligations.
• Establish a dispute resolution process if one of the parties fails to fulfill their obligations.
• Draft a provision outlining consequences for breach of contract.
• Determine the remedies the non-breaching party can use if there is a breach of contract.
• Make sure to include an attorney’s fees provision.

You can check this off your list when you have discussed the legal consequences of breach of contract, established a dispute resolution process, drafted a provision outlining consequences, and determined remedies.

Addressing confidentiality and non-disclosure agreements

• Discuss what information needs to remain secret and confidential
• Draft a non-disclosure agreement that both parties agree to
• Include the list of confidential information that is to remain private
• Ensure that the agreement covers the duration of the contract
• Make sure both parties are aware of the consequences of breach of contract
• Once both parties have agreed to the non-disclosure agreement, the step can be considered complete and you can move on to the next step.

Defining the confidential information to be kept private

• Outline and define the confidential information that the Finder will receive and keep private.
• List what information the Finder is not allowed to share, including confidential information, trade secrets, technical data, customer and supplier lists, and any other proprietary information.
• Specify what actions the Finder must take to ensure that the confidential information is kept private.
• Be sure to include a clause which states that if any confidential information is disclosed, the Finder will be liable for any damages suffered by the business.

Once all the confidential information has been defined and outlined, you can check this step off your list and move on to the next step.

Including a non-disclosure agreement if necessary

• Determine if a non-disclosure agreement is necessary to protect any confidential information discussed during the finder’s activities.
• Consider the following when drafting the non-disclosure agreement:
• Who is the disclosing party?
• Who is the receiving party?
• What type of confidential information is being protected?
• What constitutes a breach of the agreement?
• What are the remedies in the case of a breach?
• Once the non-disclosure agreement has been drafted and signed by both parties, you can move on to the next step.

Clarifying the jurisdiction and governing law of the agreement

• Identify the country or state where the parties involved in the agreement are located
• Research the relevant laws in the jurisdiction identified, including any applicable statutes related to finders agreements
• Decide on the governing law for the agreement, which should be the law of the jurisdiction identified
• Specify the governing law in the agreement
• Ensure that all parties agree to the governing law specified in the agreement

When you can check this step off your list:

• Once all parties involved have agreed to the governing law specified in the agreement and the agreement has been signed, this step can be checked off the list.

Determining the applicable law for the agreement

• Research the applicable state law for the agreement, taking into consideration the governing law and jurisdiction identified in the previous step.
• Look into the state’s statutes and regulations related to finders agreements.
• Consult with a lawyer or other legal advisor to ensure that the language of the agreement is in compliance with the applicable state law.
• Once you have determined the applicable state law, update the agreement accordingly.
• You can check this off your list once you have completed the necessary research and updated the agreement with the applicable state law.

Determining the applicable jurisdiction for the agreement

• Check what jurisdiction the parties to the agreement are located in
• Consider whether any of the parties to the agreement have a presence in any other jurisdictions
• Look at what type of agreement is being drafted and consider whether a certain jurisdiction may be more suitable based on the subject matter of the agreement
• Research any applicable governing laws of the potential jurisdiction to make sure they are compatible with the agreement
• Once you have selected a jurisdiction, list it in the agreement

Once you have determined the applicable jurisdiction and listed it in the agreement, you can check this off your list and move on to the next step.

Discussing dispute resolution and termination provisions

• Agree on a method for resolving disputes, such as arbitration or court proceedings
• Determine any applicable statutes or regulations that may come into play
• Agree on any specific procedures you need to follow for dispute resolution
• Determine how to handle termination of the Finders Agreement, such as in the event of a breach or mutual agreement
• Make sure all parties have a clear understanding of the dispute resolution and termination provisions

You will know you can check this step off your list when all parties have agreed on the dispute resolution and termination provisions and have a clear understanding of them.

Explaining the process for resolving disputes

• Decide on the type of dispute resolution process to use, such as arbitration, mediation or litigation
• Outline which law or governing body will oversee any disputes that may arise
• Draft language that sets forth the process for resolving disputes
• Consider whether the agreement should include a provision that requires the parties to seek to resolve the dispute in good faith before initiating a formal dispute resolution process
• Add any other terms or conditions related to dispute resolution that both parties agree upon
• Review the dispute resolution language and make sure that both parties understand their obligations and the process for resolving any disputes
• Once the parties agree to the dispute resolution language, the step is complete and you can move on to the next step.

Determining the conditions for terminating the agreement

• Understand the duration of the agreement and the conditions for termination.
• Review any existing contracts between the parties and determine what conditions may be applicable to the termination of the agreement.
• Specify the details of the termination, including any necessary notice periods, the consequences of termination, and the process for resolving any disputes.
• Clarify whether the agreement will automatically terminate upon the completion of the finder’s assignment, or if additional termination conditions need to be specified.
• Note any potential termination events, such as the failure to perform any obligations or the breach of any terms of the agreement.
• When all termination conditions have been established, the parties can modify the agreement accordingly and sign the document.

When you have determined the conditions for terminating the agreement, you can check this off your list and move on to the next step.

Determining the mutual rights and responsibilities of the parties involved

• Identify what rights and responsibilities should be included in the agreement
• Discuss the obligations of each party involved
• Establish the method of payment for the finder
• Specify when and how the finder will be compensated
• Outline any potential risks or legal liabilities
• Include any other relevant provisions

When you have identified and discussed all the rights and responsibilities of the parties involved, you can proceed to the next step of writing them out in the agreement.

Writing out the rights and responsibilities of each party

• Create an outline of the rights and responsibilities for each party, focusing on the specifics of their roles in the agreement
• Sit down with all the parties involved to discuss and negotiate the outline in detail
• Make sure all parties are in agreement with the rights and responsibilities that are set forth
• Draft a written document outlining the rights and responsibilities of each party
• Make sure the document is clear, concise, and legally binding
• Have all parties involved sign the document to make it legally binding

When you can check this off your list and move on to the next step:

• Once all parties involved have signed the document outlining the rights and responsibilities of each party
• After all parties agree to the document and its contents
• When all parties have legally bound themselves to the agreement by signing it

Establishing enforcement mechanisms for the rights and responsibilities

• Outline the consequences for any breach of the agreement, such as financial penalty or termination of the contract
• Specify the method of dispute resolution, such as arbitration or mediation
• Draft a clause that states which court will have jurisdiction over any disputes that may arise out of the agreement
• Consider if any third-party enforcement is required, such as a lawyer or expert
• Insert a clause that stipulates how any legal fees will be paid in the event of a dispute
• Once you have specified all of the enforcement mechanisms, you can check this step off your list and move on to the next step.

FAQ

Q: What are the key differences between a Finders Agreement and an Engagement Agreement?

Asked by Bryan on March 14th 2022.
A: Generally speaking, a Finders Agreement is used to engage someone to introduce potential business opportunities to a company, while an Engagement Agreement is used to engage someone to provide services or products. A Finders Agreement should include the scope of the finder’s activities, their compensation, confidentiality provisions and other related terms. On the other hand, an Engagement Agreement should outline the scope of work and services, specific deliverables, timelines, pricing, payment terms and other related terms.

Q: Can I use a Finders Agreement in the US?

Asked by Paul on November 22nd 2022.
A: Yes, you can use a Finders Agreement in the US. It is important to ensure that your Finders Agreement complies with applicable law in your jurisdiction as laws vary from state to state. Additionally, it is important to ensure that you have all necessary regulatory licenses or permits if required by law.

Q: What happens if the Finder breaches the agreement?

Asked by Ashley on July 5th 2022.
A: If the Finder breaches the agreement, it is important to assess the damage caused by the breach and determine a course of action which may include negotiation or legal action. Depending on the nature of the breach and applicable law, you may be able to seek damages for any losses suffered.

Q: Is a Finders Agreement enforceable in UK law?

Asked by Emily on February 9th 2022.
A: Yes, a Finders Agreement can be enforceable in UK law if certain conditions are met. These conditions include that both parties have capacity to enter into a contract, that both parties have provided accurate information and received advice where necessary, that there has been no duress or undue influence, that there is consideration (payment) for any services provided and that all relevant laws have been complied with.

Q: How do I ensure my Finders Agreement complies with EU laws?

Asked by Jason on October 27th 2022.
A: You should review applicable EU laws including applicable data protection legislation to ensure your Finders Agreement complies with them. Additionally, it may be beneficial to seek legal advice from an experienced lawyer or contract consultant who has knowledge of the relevant EU laws and regulations to ensure your agreement is legally binding and compliant with relevant EU laws.

Q: Is it necessary to have a separate agreement for each Finder?

Asked by Rachel on June 17th 2022.
A: It depends on your particular circumstances and jurisdiction as some jurisdictions may require separate agreements for each Finder while others may not require this. Generally speaking, having separate agreements for each Finder can help protect both parties in case of any disputes or misunderstandings as each agreement will be tailored to the specific Finder’s role and responsibilities in respect of their services provided under the agreement.

Q: What are my obligations as a Finder under an agreement?

Asked by Ryan on January 4th 2022.
A: Generally speaking, your obligations as a Finder under an agreement will depend on your specific role under the agreement and what is agreed between you and your client. However, some common obligations may include introducing potential business opportunities promptly and accurately; providing timely feedback about presented opportunities; ensuring all information provided is accurate; ensuring any information shared with potential clients is kept confidential; adhering to any legal requirements applicable in your jurisdiction; acting in good faith; and acting within the scope of the agreement at all times.

Q: What should I consider when calculating payment terms for a Finder?

Asked by David on August 6th 2022.
A: When calculating payment terms for a Finder there are several factors which should be taken into consideration including but not limited to; whether they will receive payment regardless of whether they find any opportunities or if they will only receive payment upon successful completion of an opportunity; whether they will receive one-off payments or ongoing payments; how long after completion of an opportunity they will receive their payment; what currency they will be paid in; whether payment will be made in installments over time; whether they will receive additional bonuses or additional payments based on performance metrics; and what other incentives may be offered such as equity or royalties if applicable.

Q: How do I draft a non-compete clause for my Finders Agreement?

Asked by Matthew on December 15th 2022.
A: A non-compete clause is intended to protect your interests from potential competitors who may have access to confidential information when working as a Finder for your company. It should specify how long after terminating their employment with you that your former employee must refrain from competing against you (usually 12 months). It should also specify geographic restrictions (country/region) as well as activities that are prohibited (such as developing similar products/services). Finally, it should specify what remedies are available if these restrictions are breached – such as liquidated damages or injunctive relief (restraining orders).

Q: What type of language should I use in my Finders Agreement?

Asked by Jessica on April 20th 2022.
A: When drafting a Finders Agreement it is important to use clear and concise language which is easy to understand while avoiding legal jargon where possible. It should also be written in plain English which can easily be interpreted by both parties without ambiguity. Additionally, it should include appropriate legal terminology where necessary such as ‘hereinafter’ or ‘herein’ rather than ‘after this’ or ‘in this’ respectively so that it is legally binding and enforceable if necessary.

Q: Is there any difference between US and UK versions of a Finders Agreement?

Asked by Mark on July 29th 2022.
A: Yes, there can be some differences between US and UK versions of a Finders Agreement depending on applicable law in each jurisdiction including but not limited to; how payment terms are calculated; how long after termination of employment before competing against you would be allowed; what remedies are available if restrictions are breached; whether choice of law provisions must be included; whether indemnification clauses are necessary; and how confidential information must be handled. It is therefore important to seek legal advice from experienced lawyers who have knowledge of both US and UK laws when drafting such agreements so that they comply with applicable law in each jurisdiction.

Q: Is it possible to tailor my Finders Agreement for different sectors e.g SaaS or Technology?

Asked by Steven on August 26th 2022.
A: Yes, it is possible to tailor a Finders Agreement for different sectors depending on your particular needs such as SaaS or Technology sectors as long as it complies with applicable laws in your jurisdiction(s). Depending on sector specific requirements such as those related to intellectual property rights or data protection regulations additional clauses may need to be included when drafting such agreements so that they comply with sector specific requirements while still protecting both parties’ interests adequately at all times

Example dispute

Lawsuits Referencing Finders Agreement

• Finders agreements are legally binding contracts that set out the terms of engagement between a broker or finder and the company they are attempting to bring together with a client.
• These agreements can be used to protect the interests of both parties and to ensure that they are adequately compensated for their services.
• A plaintiff may raise a lawsuit referencing a finders agreement if they feel that the agreement has been breached in some way.
• Common causes of action in such lawsuits include breach of contract, fraud, or unjust enrichment.
• In such cases, the plaintiff must provide evidence that the agreement was breached, such as by proving that the finder was not adequately compensated for their services or that the agreement was not followed.
• If successful, the plaintiff may be awarded damages to compensate them for any losses suffered as a result of the breach.
• In some cases, the court may also order the defendant to pay the plaintiff’s legal costs.

Templates available (free to use)

Finders Agreement

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