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Finder's Fee Agreement
I need a finder's fee agreement for a consultant who will introduce potential investors to our real estate development project in Dubai. The agreement should specify a 5% commission on successful investments, confidentiality clauses, and a 12-month validity period.
What is a Finder's Fee Agreement?
A Finder's Fee Agreement spells out how much someone gets paid for connecting two parties in a successful business deal. In the UAE, these agreements are common in real estate, mergers and acquisitions, and investment circles, where intermediaries help companies or individuals find exactly what they're looking for.
Under UAE commercial law, these contracts must clearly state the fee structure, typically a percentage of the deal value or a flat rate, and outline when payment becomes due. The agreement protects both the finder and the client by defining the scope of services, payment terms, and confidentiality requirements - especially important in Dubai's competitive business landscape.
When should you use a Finder's Fee Agreement?
Use a Finder's Fee Agreement when connecting parties in UAE business deals, particularly before making introductions that could lead to successful transactions. This applies when helping source investors for a startup, finding buyers for commercial property, or matching businesses with strategic partners - situations where your network and expertise create valuable connections.
The agreement becomes essential before sharing sensitive details or making formal introductions, especially in Dubai's dynamic market. It protects your right to compensation while clarifying your role as an intermediary. Many UAE businesses require this documentation before engaging with finders to avoid future disputes about commission structures and payment timing.
What are the different types of Finder's Fee Agreement?
- Fixed Fee Agreements: Set a specific amount regardless of transaction value, common in UAE real estate deals under AED 5 million
- Percentage-Based Agreements: Calculate fees as 1-5% of final transaction value, typical in larger property or business sales
- Success-Fee Only: Payment occurs only after deal completion, popular in investment matchmaking
- Retainer Plus Commission: Combines monthly fees with success bonuses, used for ongoing business development
- Tiered Fee Structures: Rates adjust based on deal size or complexity, common in Dubai's financial sector
Who should typically use a Finder's Fee Agreement?
- Business Brokers: Draft and use these agreements when connecting buyers with sellers in UAE markets, especially in real estate and M&A deals
- Investment Consultants: Rely on these contracts when introducing potential investors to UAE businesses seeking capital
- Company Owners: Sign as the paying party, agreeing to compensate finders for successful introductions to buyers or investors
- Legal Counsel: Review and modify agreement terms to ensure compliance with UAE commercial laws
- Corporate Finance Advisors: Use these agreements when facilitating strategic partnerships or funding arrangements in Dubai's financial sector
How do you write a Finder's Fee Agreement?
- Party Details: Collect full legal names, contact information, and trade licenses of both the finder and the client
- Deal Scope: Define exactly what constitutes a successful introduction and the specific industry or transaction type
- Fee Structure: Determine payment terms, including percentage rates or fixed amounts, and any performance milestones
- Time Limits: Set clear deadlines for introductions and deal completion to qualify for payment
- Confidentiality Terms: Outline how sensitive information will be handled and protected under UAE law
- Documentation: Prepare proof of introduction methods and tracking systems for potential matches
What should be included in a Finder's Fee Agreement?
- Identification Section: Full legal names and addresses of all parties, including UAE trade license numbers
- Services Definition: Clear description of finder's role, target introductions, and success criteria
- Compensation Terms: Detailed fee structure, payment timing, and conditions for earning the fee
- Exclusivity Clause: Specifications about exclusive or non-exclusive introduction rights
- Confidentiality Terms: Protection of sensitive business information under UAE privacy laws
- Governing Law: Clear statement designating UAE law and specific emirate jurisdiction
- Termination Rights: Conditions and process for ending the agreement
What's the difference between a Finder's Fee Agreement and a Broker Agreement?
A Finder's Fee Agreement differs significantly from a Broker Agreement, though both involve intermediaries in business transactions. The key distinctions lie in their scope, obligations, and regulatory requirements under UAE law.
- Scope of Service: Finders simply introduce parties and step back, while brokers actively negotiate, advise, and facilitate the entire transaction process
- Regulatory Requirements: Brokers must hold specific UAE licenses and meet regulatory standards; finders typically don't need special credentials
- Legal Liability: Brokers carry professional liability for transaction advice and outcomes; finders are only responsible for making genuine introductions
- Compensation Structure: Broker fees often include ongoing services and success-based components, while finder's fees are usually one-time payments for successful introductions
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