# Recruitment Terms of Business: What to Include Before You Send a Single CV

> Recruitment terms of business are the contract between your agency and the client that sets out when a fee is earned, how it is calculated, when it must be paid and what happens if a candidate leaves early or is hired later. Agree them in writing before you send the first CV, and have a lawyer review the final wording for your market.

Source: https://hiring-intelligence.io/en/blog/recruitment-terms-of-business
Author: Philipp Kaming · Published: 2026-11-08

You have just won a new client. The hiring manager wants CVs by Friday, and the last thing you feel like doing is chasing a signature on a document nobody reads. So you send the profiles first and plan to sort the paperwork later.

That is how agencies end up arguing about fees. The candidate gets hired three months after the client said "not for us", or the client forwards your CV to a sister company, or the invoice sits unpaid for 90 days. Without agreed terms you are negotiating after the fact, from the weakest possible position.

This guide covers what your terms of business should contain and which legal points to check in the UK and US. It describes content, not wording. **This is not legal advice.** Have a solicitor or attorney who knows recruitment draft or review your final terms.

## What are recruitment terms of business?

Your terms of business are the agreement between your agency and the hiring company. For permanent recruitment they mainly answer five questions:

1. What exactly triggers a fee?
2. How is the fee calculated?
3. When does the client have to pay?
4. What happens if the candidate leaves early?
5. How long does the client "owe" you for a candidate you introduced?

Temp and contract staffing needs additional terms covering hourly charges, timesheets and transfer fees. If you run both, keep them as separate documents so the client knows which rules apply.

## When should you agree terms with a new client?

Before you send the first CV. Not after the first interview, not when the offer is made.

In practice that means:

- Send your terms straight after the first meeting, together with your summary of the role.
- Ask for a written confirmation, ideally a signature or an email that says "agreed".
- Log the date of acceptance in your CRM against the client record.
- If the client wants to use their own supplier agreement instead, read it carefully. Large companies often have standard terms with longer payment periods, stricter rebates or a cap on fees.

Many agencies also include a clause stating that interviewing or hiring a candidate counts as acceptance. Whether that holds up depends on the circumstances, so a clear written acceptance is always the safer route.

If you want to walk through terms naturally in the first conversation, our guide to the [recruitment client meeting](/en/blog/recruitment-client-meeting) shows where conditions fit into the agenda.

## What should recruitment terms of business include?

Here is a checklist of content points most agency terms cover. Use it to brief your lawyer or to check the terms you already have.

| Topic | What to define | Why it matters |
|---|---|---|
| Parties and scope | Who the agreement is between, which services it covers (perm, retained, temp) | Avoids "we never agreed to that" |
| Fee and basis | Percentage or flat fee, and what it is calculated on: base salary, guaranteed bonus, car allowance, total first-year package | The most common fee dispute |
| Worked example | One calculation in the terms themselves | Removes ambiguity in a single line |
| When the fee is earned | Offer accepted, contract signed or start date | Decides when you can invoice |
| Payment terms | Invoice date, days to pay, what happens on late payment | Protects cash flow |
| Rebate or replacement | Period, sliding scale or free replacement, conditions | Clients expect protection |
| Conditions for the rebate | Paid on time, notice within a few days, exclusions such as redundancy | Stops the rebate becoming an automatic discount |
| Introduction ownership | How long an introduction remains valid, and that the fee applies if the client hires later | Prevents "backdoor" hires |
| Third-party introductions | Fee applies if the client passes your candidate to another company or group entity | CVs travel faster than you think |
| Different role, same candidate | Fee applies if the candidate is hired for another position | A common loophole |
| Withdrawn offer | What happens if the client withdraws an accepted offer | Your work is done either way |
| Candidate checks | What you check and what remains the client's responsibility (references, right to work, qualifications) | Limits your liability |
| Data protection | How candidate data may be used, no onward sharing without consent | Required under UK GDPR and similar laws |
| Liability and governing law | Liability limits, which law and courts apply | Matters when you place across borders or states |
| VAT and taxes | Fees stated net, plus VAT where it applies | Avoids discussions on the invoice |

Fee levels themselves are a commercial decision. Our guide to [recruitment agency fees](/en/blog/recruitment-agency-fees) covers the usual rates, banded fees and how rebate schemes are typically structured.

### The clauses that cause the most disputes

From the agency side, three areas deserve extra care:

- **The fee basis.** "Salary" means different things to different people. Spell out which elements count and add a worked example.
- **Introduction ownership.** Define what counts as an introduction (sending a CV, naming a candidate, arranging an interview) and how long it stays valid.
- **Rebate conditions.** Tie any rebate to payment on time and to the client telling you quickly when a candidate leaves.

## What do UK recruitment agencies need to check?

In the UK, agencies and employment businesses fall under the Conduct of Employment Agencies and Employment Businesses Regulations 2003, usually just called the Conduct Regulations. A few points are relevant to client terms:

- **Fees to clients are a commercial matter.** Government guidance states that the Conduct Regulations do not set fee levels for hirers; those are treated as a business-to-business agreement.
- **Information before you introduce a candidate.** Regulation 18 requires you to obtain enough information from the hirer before introducing a work-seeker, such as the hirer's identity, the role, location, hours, required qualifications and, for agencies, the minimum pay on offer. Your onboarding process should capture this.
- **Transfer fees if you supply temps.** If you charge a fee when a client takes on one of your temps permanently, Regulation 10 applies. You must offer an extended period of hire as an alternative, otherwise the transfer fee is unenforceable, and the fee can only be charged within the "relevant period" set out in the guidance. The fee must be stated in your terms with the hirer.
- **Late payment.** For business-to-business debts, the Late Payment of Commercial Debts (Interest) Act 1998 allows statutory interest of 8% plus the Bank of England base rate, unless your contract sets a different rate.

The Conduct Regulations also contain detailed rules for your terms with candidates and temps. Those are a separate document and outside this article.

## What about the US?

There is no single national rulebook for agency terms in the US. A few practical points:

- **Licensing depends on the state**, and sometimes the city. Check the rules wherever you have an office and wherever you place people.
- **Fee basis.** Many US agreements calculate the fee on total first-year compensation including bonus, while many UK terms use base salary. Say explicitly which one you mean.
- **Guarantee period.** US terms typically describe a guarantee period in days during which you replace the hire or refund part of the fee.
- **Governing law.** If you place candidates in several states, define which state's law governs the agreement.

A local employment or commercial attorney is the right person to sign off your template.

## Common mistakes with terms of business

1. Sending CVs before terms are accepted.
2. Using a template from the internet without checking it fits your model and market.
3. Leaving "salary" undefined.
4. Offering a rebate with no conditions attached.
5. Signing a client's supplier agreement without reading the fee and rebate clauses.
6. Never updating the terms when you add a new service, such as temp or retained search.

## Where terms fit into business development

Good terms protect the fees you earn. They do not create new clients. The agencies that hold their terms best are usually the ones with enough pipeline that they do not need to accept every client's paper. If you are unsure whether a client's conditions are worth it, our guide on [which recruitment assignments to take](/en/blog/which-recruitment-assignments-to-take) helps you decide.

[LeadFlow](/en/services/leadflow) delivers companies that are hiring in your niche, with the decision maker, into your CRM every day. And if you work in Close, [SalesPower](/en/services/salespower) sets up the CRM with automations, so steps like "terms sent" and "terms agreed" can be tracked in your pipeline instead of in your inbox.

## Key takeaways

- Agree terms in writing before sending the first CV, and record the acceptance.
- Define the fee basis precisely and include a worked example.
- Cover introduction ownership, third-party introductions and hires into a different role.
- Tie rebates to prompt payment and quick notice, and exclude reasons outside your control.
- In the UK, check the Conduct Regulations, especially Regulation 18 and, for temps, Regulation 10.
- Have a lawyer review your final template. This article is not legal advice.

## FAQ

### What are terms of business in recruitment?
Terms of business are the contract between a recruitment agency and its client. They set out when a fee is earned, how it is calculated, when it is due, what happens if a candidate leaves early and how long an introduction stays valid. They should be agreed before the agency sends any candidates.

### Do recruitment agencies need signed terms of business?
Agencies should always get clear written acceptance before introducing candidates, ideally a signature or a confirming email. Some terms say that interviewing a candidate counts as acceptance, but whether that is enforceable depends on the circumstances. A written acceptance avoids that question entirely.

### Can a UK agency charge a fee if a client hires a temp permanently?
Yes, but if you supplied the worker as a temp, Regulation 10 of the Conduct Regulations applies. You must offer the client an extended period of hire as an alternative to the fee, and the fee can only be charged within the relevant period. The transfer fee must be stated in your terms with the hirer.

### What should a recruitment rebate clause include?
The rebate period, whether you refund or replace, how the refund scales over time and the conditions. Most agencies make the rebate depend on the invoice being paid on time and on the client reporting the candidate's departure within a few days, and exclude reasons such as redundancy.