Write every referral arrangement down on one page, in plain language, and tell the customer about any fee, discount or reciprocal promise behind the recommendation. That protects the relationship between you and your partner, and it protects the customer's ability to judge the recommendation fairly. This guide covers what the page should say, how to word the disclosure, and what to keep out of the deal. It summarises public guidance as of October 2026 but isn't legal advice. Van.Network is a marketing and consulting service, not a law firm and not a contractor.
Why handshake deals go wrong
Most referral arrangements begin informally: "Send me your bathroom jobs and I'll look after you." Then the details blur.
- Was "look after you" a percentage, a fixed amount or a dinner?
- Does it apply to the first job only, or every job for that customer?
- What if you quote and the customer goes elsewhere?
- What if the customer complains about you to the partner?
Each of these questions eventually comes up. The relationship survives far better when the answers were written down before money or reputation was at stake.
What Canadian guidance says about disclosure
Canada's Competition Bureau has published guidance on influencer marketing and the Competition Act. It's aimed at people promoting a business, product or service, and it says they should disclose material connections to the business. Its examples include payment or commissions, free products or services, discounts, and personal or family relationships. It also says disclosures should be prominent and in plain language rather than hidden in fine print, hashtags or a profile.
In a January 2024 release, the Bureau said employees reviewing their employer must disclose that connection, and that businesses which write or allow reviews that create a false or misleading impression could be liable under the Competition Act.
Much of that guidance is framed around online promotion and reviews. A plumber recommending a renovator over coffee isn't an influencer. But the principle carries over neatly: if a recommendation has a connection behind it, the person receiving it should know. For questions about what the law requires in your situation, ask a lawyer. For consumer-protection questions in BC, Consumer Protection BC is the provincial regulator to look at.
The eight things a one-page agreement should settle
- Who. Both business names, and the day-to-day contact for each.
- Scope. Which kinds of jobs each side refers, which are excluded, and the area each side serves. In Metro Vancouver, naming municipalities avoids arguments about distant jobs.
- What counts as a referral. Usually a customer who contacts you through the partner's tracking number, code or page, or who names the partner when asked.
- Response standard. For example: contact within one business day; a note back to the partner when the job is booked or declined.
- The arrangement. One of: nothing; reciprocal referrals only; a fixed thank-you per booked job; a percentage; or a customer discount. State when it's paid and how it's counted.
- Disclosure. The exact sentence used, and where it appears.
- Customer care. Who calls the customer if something goes wrong, and how the partner is kept informed.
- Ending it. Notice either side gives, and what happens to referrals already in progress.
Keep it to one page if you can. Agreements that run to many pages tend not to be read, and an unread agreement settles nothing.
Writing the disclosure
A good disclosure is one sentence, in ordinary words, placed where the customer will see it. Templates to adapt:
- No money involved: "We refer customers to [Business name] and they refer customers to us. No payments are involved."
- Fixed thank-you: "We have a referral arrangement with [Business name]: if you book with them, they pay us a thank-you of [amount]."
- Customer discount: "Because we referred you, [Business name] will take [discount] off your first job. We also receive [describe anything you receive, or say nothing else]."
- Personal relationship: "[Business name] is run by a family member of our owner."
Words to avoid on their own: "trusted partner", "preferred", "approved", "certified". They sound like disclosure but tell the customer nothing about what's behind the recommendation.
Where it should appear
| Where the referral happens | Where the disclosure goes |
|---|---|
| Spoken recommendation | Said aloud, and repeated in the follow-up text or email |
| Quote or estimate | A line on the document, near the partner's name |
| Text or email with the partner's details | In the same message, not a separate one |
| A referral landing page | Near the top, in normal-size text |
What to keep out of the deal
Some things don't belong in any referral agreement:
- Reviews. Don't agree to review each other, ask referred customers to review the partner as part of the arrangement, or offer anything for reviews. Reviews should reflect real experience.
- Website links for rankings. Requiring a partner to link to you so you rank higher is a link scheme under Google's rules. Our guide on partner links and Google explains the distinction.
- Exclusivity you can't honour. "We'll only ever refer you" sounds generous, but it fails the first time you're booked solid or the job is outside their scope.
- Promises about volume. Neither side should promise a number of referrals.
Regulated professions
Several professions that commonly sit in a trades referral network have their own rules. Realtors, lawyers, accountants, insurance brokers and others may face restrictions on paying or receiving referral fees, or on how referrals must be disclosed. We don't summarise those rules, because they vary and change. Before agreeing to any payment with a regulated professional, ask them to confirm with their regulator or professional body, and keep their answer on file.
A checklist to take to your lawyer
- ☐ Both businesses and contacts are named
- ☐ Scope and service areas are clear
- ☐ The definition of a referral matches how you track them
- ☐ The arrangement is stated in numbers, with timing
- ☐ The disclosure sentence is written out and its locations listed
- ☐ Reviews and links are explicitly excluded
- ☐ Customer-care and complaint handling are covered
- ☐ Ending terms are clear
- ☐ Any regulated professional has confirmed their rules
Keeping it alive
An agreement written once and forgotten slowly drifts from reality. Review each one when you review the tracking numbers, at least once or twice a year. Check that the disclosure is still being used, the payments match the referral log, and the scope still reflects the work you both do.
If you'd like help drafting a first agreement and disclosure for your lawyer to review, that's our referral terms service. To check whether a partnership is worth formalising at all, start with the guide on what a referral partner is worth.
Frequently asked questions
Does a referral agreement have to be a formal contract?
That's a question for your lawyer. From a business point of view, the important thing is that both sides have the same written understanding. Many owners start with a plain one-page summary that a lawyer then reviews.
What counts as a connection I should disclose?
The Competition Bureau's examples include payments or commissions, free products or services, discounts and personal or family relationships. Our working rule is: if it could affect how a customer weighs the recommendation, say so.
Where should the disclosure appear?
Wherever the recommendation happens: in conversation, on the quote, in the text or email, and on any referral page. It should be visible without the customer having to look for it.
Can we agree to review each other's businesses?
Don't. Reviews should reflect a customer's genuine experience. Trading reviews between partners risks misleading customers and is exactly what the Competition Bureau has warned businesses about.