3 Things To Consider In Your Software Referral Agreement

3 Things To Consider In Your Software Referral Agreement

While there are many different issues to include in a software or software services referral agreement (SAAS referral agreement), here are a few practical things to consider:

1) What is In and Out. What types of referrals will  you pay on, and what types won’t you? Don’t forget excluding transactions that are already in flight or that don’t close within x amount of time. What about extensions of the transaction? Be super clear on all these issues, as this is the key part of the agreement (quite frankly most of the disputes I see are related to these issue).

2) Payment/Reporting.  Do you want to pay after each transaction, or on a monthly/quarterly basis under a report? Also, don’t forget to address credits and returns, and that you have to be paid first (before you pay them).

3) Simplicity/Plain English. Keep this agreement simple, and short, as you want to make sure (a) your partner understands the agreement, and (b) your internal sales/channel teams understand it too. Any confusion between these two groups on referrals could create a lot of disagreements.

Just a few thoughts from a software attorney.



This is provided for educational and informational purposes only, and is not legal advice. Talk to your attorney for legal advice, as they should consider the pertinent facts and applicable law before providing any advice.

  1. Hello, does saas referral agreement differs from saas affiliate agreement ? We like to build strong reseller community for our saas software http://repignite.com and we still didn’t now if we need to separate agreements for affiliates, referrals and resellers. Any hints for it

    Thanks so much
    Paul Jordan

    • Jeremy Aber

      Paul, thanks for the question.

      I think that affiliate agreement can mean many different things and there is one size fits all affiliate agreement (I often see clients create affiliate agreements as in substance a development agreement, integration agreement, marketing agreement, referral agreement or reseller agreement (or a combination of these)). What really matters is the substance of the affiliate model, and what you want it to say. Reseller agreements are different, as they are typically the agreement under which the partner company can resell or embedded (like an OEM) the vendor’s software with or as part of the partner’s offering. Whether these agreements should be separate or combined with a referral agreement, really depends on the 80/20 rule. For example, if 80% of your partners will be sending you referrals and reselling your offering, then I would combine these two models in one agreement. However, if the opposite is true then I would create separate agreements. You can also build these agreements in a modular fashion, with very general master terms and a short/1 page Referral Addendum and Reseller Addenedum.

      Remember, these agreements do not have to be long or complicated. I hope this answers your questions, and feel free to email me with any further questions. [email protected].

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