Conjunction Agreements in the UK: Legal Overview

If another business has offered to “work together” on a deal, introduce clients, share commissions, or team up on delivery, a conjunction agreement is often the document that should sit underneath that arrangement.

Many founders make the same mistakes here: they rely on a verbal promise about referrals, they accept vague wording about who gets paid and when, or they sign a short agreement that never properly deals with confidentiality, liability, or ownership of customer relationships.

That becomes a problem when the first sale lands, the project scope changes, or one side believes it brought in the customer and deserves more of the revenue. A conjunction agreement can be useful, but only if the commercial deal is recorded clearly in written terms. This guide explains what a conjunction agreement means for UK businesses, when it is commonly used, what legal issues to check before you sign, and the mistakes that most often lead to disputes.

Overview

A conjunction agreement is usually a commercial contract between two businesses that want to cooperate in some way without becoming business partners or forming a new company. In practice, it often covers referrals, joint marketing, co-delivery of services, shared commissions, or lead generation, but the exact effect depends on the wording.

The label matters less than the terms. Before you sign, the agreement should make clear what each side must do, how money is paid, who owns the customer relationship, and what happens if the arrangement ends.

Define the purpose of the relationship, such as referrals, introductions, co-selling, or service delivery
State each party’s obligations in clear operational terms, not broad promises to “work together”
Set out payment terms, commission triggers, invoicing, and what happens if the client does not pay
Clarify exclusivity, territory, target clients, and whether either side can work with competitors
Deal with confidentiality, data sharing, and UK GDPR responsibilities where personal data is involved
Explain ownership of leads, contracts, intellectual property, and customer goodwill
Include termination rights, notice periods, and what happens to ongoing deals after termination
Limit liability sensibly and avoid clauses that shift all risk onto one side without negotiation

What What Is a Conjunction Agreement Means For UK Businesses

A conjunction agreement usually means one business and another business are cooperating under a contract, but they are not automatically creating a legal partnership. That distinction is important because many SMEs use these agreements to grow sales or expand capability, while assuming the relationship is informal and low risk.

In plain English, a conjunction agreement is often a tailored collaboration contract. One party may refer business to the other. Both may promote a joint offer. One may sell and the other may deliver. Sometimes both businesses share fees or commissions after a client signs up.

Where businesses usually use one

Founders come across conjunction agreements in a few familiar situations. A marketing agency may introduce clients to a web developer and expect a referral fee. A consultant may team up with a software provider to sell an implementation package. Two specialist firms may collaborate to win a larger contract neither could handle alone.

In each case, the commercial idea sounds straightforward, but the legal position can get messy quickly if the contract is vague.

A referrer introduces leads and receives a percentage of revenue
A reseller or intermediary helps close deals for another provider
Two businesses jointly pitch for work and split fees
One business handles client acquisition while the other performs the services
A white label or subcontracting arrangement is described informally as a joint venture, even though the legal structure is different

It is not a standard legal term with one fixed meaning

The phrase “conjunction agreement” is not a single defined contract type under UK law. You might see similar arrangements documented instead as a referral agreement, introducer agreement, collaboration agreement, reseller agreement, channel partner agreement, subcontracting agreement, commission agreement, or joint marketing agreement.

That matters because the title alone does not tell you enough. Before you rely on the document, you need to understand the legal effect of the clauses inside it.

Why founders use them

The appeal is simple: a conjunction agreement can help you grow without hiring a full sales team, opening a new department, or taking on a formal business partner. It can also help you test a market or bundle services with another SME.

Used properly, it can give structure to a commercial relationship while keeping roles separate. Used badly, it can leave both sides arguing over the same customer, the same invoice, and the same promises.

Why the partnership point matters

One of the biggest risks is accidentally creating expectations that look more like a partnership or agency relationship than a limited commercial collaboration. If the agreement says both parties can bind each other, act on each other’s behalf, or present themselves as a single business, legal and commercial risk rises quickly.

Before you sign a contract like this, the document should say clearly whether either party has authority to make commitments for the other. If the answer is no, that should be written in direct terms.

Customer ownership is often the real issue

Many disputes are not really about the label “conjunction agreement”. They are about who owns the client relationship. If one side introduces a lead and the other turns it into a long term account, questions follow:

Does the introducer get paid once, or for repeat work too?
Who controls pricing and contract terms with the end customer?
Can the provider deal directly with that customer in future?
Who handles complaints, refunds, or service credits?
Can either party use the customer’s name in marketing?

If your agreement does not answer those points, the arrangement may look workable at the start but break down as soon as the first meaningful revenue arrives.

Legal Issues To Check Before You Sign

The main legal question before you sign is not what the agreement is called, but whether the clauses match how the relationship will work in real life. A short, generic draft often misses the points that actually cause disputes.

Scope of work and responsibilities

The contract should say exactly what each business must do. If one side is expected to generate qualified leads, define what counts as a qualified lead. If one side is expected to deliver services, describe the service boundary and what is outside scope.

Vague promises to “cooperate”, “support sales” or “work in conjunction” do not help much when there is a disagreement. Before you rely on a verbal promise, get the practical details written down.

Who finds the lead or opportunity
Who prepares proposals and pricing
Who signs the customer contract
Who performs the work
Who provides ongoing support
Who handles billing and collection

Payment terms and commission triggers

This is where founders often get caught. One party assumes payment is due when a customer signs. The other assumes it is only due when money is received. A good conjunction agreement deals with the trigger, amount, timing, and method of payment.

It should also cover edge cases. For example, what happens if the customer pays late, cancels early, disputes the invoice, or expands the scope later?

Whether fees are fixed, percentage based, recurring, or one-off
Whether VAT is included or added on top
When commission becomes earned
Whether commission is payable only on cleared funds
How chargebacks, refunds, or bad debts are treated
Whether renewals, upsells, and repeat work are included
How long payment rights continue after termination

Exclusivity and restrictions

Some conjunction agreements are non-exclusive. Others stop a party from working with competitors, targeting certain accounts, or operating in a particular sector or territory. These restrictions should be realistic and clearly drafted.

If exclusivity is included, make sure the agreement says what each side must do in return. A broad restriction without any minimum commitment can leave one business locked in while the other delivers very little.

Confidentiality and business information

Most collaborations involve sharing pricing, customer details, know-how, sales pipelines, or commercial strategy. Confidentiality clauses help protect that information during the arrangement and after it ends.

The agreement should explain:

What information is confidential
How it can be used
Who inside each business can access it
When it must be returned or deleted
What exceptions apply, such as information already public or required to be disclosed by law

If personal data moves between the parties, data protection needs attention. This often happens where leads are passed over, customer contact details are shared, or both businesses access a common CRM.

Before you accept the provider’s standard terms, check whether the agreement reflects the data reality. The parties might be independent controllers, or one may process data for the other, depending on the arrangement. The contract should align with those roles, and each business should be transparent about how personal data is used in any privacy notice.

Intellectual property and marketing materials

Do not assume a collaboration gives both sides free use of each other’s branding, content, software, or templates. If logos, brochures, slide decks, training materials, or software tools are involved, permission should be expressed clearly.

You should also check who owns any new materials created during the relationship, such as co-branded proposals, campaign content, or process documents.

Liability, indemnities and risk allocation

Every commercial agreement allocates risk. The issue is whether the risk split is sensible. If one party is delivering the service to the end customer, it may be fair for that party to bear more performance risk. But a conjunction agreement should not quietly push every claim, cost, and loss onto one side without careful review.

Look closely at liability caps, exclusions, and indemnities. Some clauses can expose a business to open-ended loss if they are not negotiated properly.

Term, termination and post-termination rights

Relationships like this often start informally and end awkwardly. The agreement should say how long it lasts, whether it renews automatically, how notice works, and what happens to live opportunities when the arrangement finishes.

Before you spend money on setup, make sure the exit is workable. Key points include:

Whether either party can terminate for convenience
What counts as material breach
Whether there is a right to cure a breach
How ongoing deals are completed
Whether commission survives for existing customers or pipeline deals
What happens to confidential information and business property on exit

Non-circumvention and direct dealing

In many referral style deals, the introducer worries the provider will bypass them after meeting the customer. The provider worries the introducer will overclaim ownership of accounts they barely touched. A well-drafted non-circumvention clause can help, but it must be specific.

It should identify which customers or leads are protected, for how long, and what conduct is restricted. Overly broad wording may be hard to enforce, while vague wording may not help at all.

Common Mistakes With What Is a Conjunction Agreement

The most common mistake is assuming a conjunction agreement is a simple formality. It is not. These arrangements often sit right at the point where sales, delivery, reputation, and revenue overlap.

Treating the title as more important than the terms

Businesses sometimes ask whether they “have” a conjunction agreement because the document carries that label. What matters is the substance. A contract called a conjunction agreement may actually operate as a referral agreement, subcontract, agency arrangement, or collaboration agreement.

If the structure is wrong, the title will not save it.

Leaving commission mechanics unclear

This causes a large share of disputes. A founder hears “10 per cent of deals introduced” and assumes the rest will sort itself out. It rarely does.

The agreement should answer practical questions in plain English:

What evidence proves an introduction happened
Who decides whether the lead was already known
When a deal counts as won
What revenue is included in the calculation
Whether discounts, refunds, and credits reduce commission
How disputes about calculations are resolved

Relying on friendly relationships

Many conjunction arrangements begin between contacts who trust each other. That trust may be genuine, but the legal document still matters. Staff change, businesses pivot, margins tighten, and memories differ.

A clear contract protects the relationship because it reduces the room for argument later.

Ignoring how the customer sees the arrangement

If both businesses are visible to the customer, confusion can arise over who is responsible for the service. That can create reputational damage even if the legal contract eventually sorts out liability between the businesses.

Before you sign, decide:

Whose contract the customer signs
Whose terms and policies apply
Who gives service commitments
Who deals with customer complaints
Who owns the messaging if something goes wrong

Overlooking data and confidentiality in referral deals

Referral and introduction arrangements often appear low risk because no goods are changing hands. But personal data and commercially sensitive information often move first, before revenue arrives. If lead details are shared without proper thought, legal and relationship issues can follow quickly.

Allowing one party to appear as agent without controls

If a business starts making promises to customers on behalf of the other, agency risk appears. That can happen casually, especially where sales discussions are shared. The contract should limit authority clearly and the businesses should follow that position in practice.

Using a generic template without adapting it

A free template can be a starting point, but conjunction agreements are highly fact-specific. A referral-only arrangement needs different wording from a co-delivery model. A software provider working through consultants has different risks from two creative agencies sharing project work.

This is where founders often get caught. The template looks familiar, but it does not reflect how the money, customer contact, or risk actually flows.

FAQs

Is a conjunction agreement the same as a partnership agreement?

No. A conjunction agreement is usually intended to document a limited commercial collaboration, not a legal partnership. The wording and the conduct of the parties still matter, so the agreement should make clear that neither party can bind the other unless expressly agreed.

Is a conjunction agreement legally binding in the UK?

It can be, if it is drafted as a contract and the usual elements of contract formation are present, such as clear terms, consideration, and intention to create legal relations. The fact that it has an unusual title does not stop it from being binding.

When should a business use a conjunction agreement?

A business may use one when it is collaborating with another business on referrals, introductions, joint marketing, co-selling, or shared delivery. The right structure depends on the real arrangement, so sometimes another form of agreement is a better fit.

Can a conjunction agreement include referral fees or commissions?

Yes. Many do. The key is to state clearly how commission is calculated, when it becomes payable, whether renewals are included, and what happens if the end customer does not pay.

Do we need separate privacy or confidentiality terms as well?

Often, the conjunction agreement itself can include confidentiality and data protection clauses. If the parties share personal data in a more structured way, they may also need additional data processing or controller-to-controller wording to reflect the actual data relationship.

Key Takeaways

A conjunction agreement is usually a contract for commercial cooperation between businesses, often covering referrals, introductions, co-selling, or service delivery
The title is less important than the legal effect of the terms, especially around payment, customer ownership, confidentiality, and liability
Before you sign a contract, make sure each party’s role is defined clearly and the agreement reflects how the arrangement will work in practice
Commission clauses need detail, including payment triggers, renewals, refunds, bad debts, and post-termination rights
Data sharing, confidentiality, branding permissions, and authority to speak for the other party should be addressed expressly
A well-drafted agreement helps reduce disputes, protects customer relationships, and makes it easier to exit cleanly if the collaboration does not work out

If you want help with commission clauses, confidentiality terms, data sharing obligations, or termination rights, you can reach us on 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.

What Is a Conjunction Agreement?