Introduction Agreement

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What is it?

An Introduction Agreement is an agreement that offers protection to a business that is sourcing goods for a client from a manufacturer because they are acting as the "middleman" in the deal.

In a sourcing arrangement, there are usually three parties: the client, the sourcing company, and the manufacturer.

Why do you need it?

Between the client and the sourcing company, there should be an Introduction Agreement. The sourcing company agrees to source products up to a certain quality and the client is prohibited from contacting the manufacturers directly.

Between the sourcing company and the manufacturer, there should be another Introduction Agreement. It requires the manufacturer to supply goods of quality acceptable to the sourcing company and prohibits the manufacturer from contacting the client directly.

Key clauses to watch for:

When drafting an Introduction Agreement, it is important to focus on a number of key clauses, in particular:

  • Details of your business;
  • Details of the payments;
  • Details of the product; and
  • The commencement date of the agreement.

Introduction Agreement Document