Vendor Agreement (New Zealand)

A New Zealand vendor agreement must include several key terms to be legally effective and commercially sound. Under the Contract and Commercial Law Act 2017 (CCLA), a contract requires offer, acceptance, consideration, and an intention to create legal relations. Essential commercial terms include: the identity of the vendor and customer; a clear description of the goods or services to be supplied; the price, payment terms, and GST treatment (GST at 15% must be charged by GST-registered vendors on all taxable supplies); delivery terms — who bears the risk of loss during delivery, and when title and risk pass; warranties — what the vendor warrants about the quality and fitness of the goods or services; liability and indemnity provisions — limiting the vendor's liability for consequential loss; intellectual property — confirming that the customer acquires no IP rights in the vendor's products or methodology; confidentiality obligations; and termination rights. The Consumer Guarantees Act 1993 implies mandatory guarantees into consumer contracts, and these cannot be excluded. Business-to-business contracts may lawfully exclude the CGA's guarantees under section 43 of the CGA, but only if the exclusion is expressed clearly and both parties are in trade.

The Consumer Guarantees Act 1993 (CGA) automatically implies minimum guarantees into contracts for the supply of goods and services to consumers (individuals acquiring goods for personal, domestic, or household purposes). These guarantees include: acceptable quality (goods must be fit for all purposes for which goods of that kind are commonly supplied, free from minor defects, acceptable in appearance, durable, and safe); fitness for a particular purpose (if the consumer relies on the vendor's skill and judgment to select goods for a particular purpose); compliance with description; title (the vendor must have the right to supply the goods); and for services, reasonable care and skill and fitness for purpose. These guarantees cannot be excluded or limited in consumer contracts. However, under section 43 of the CGA, if both the vendor and the customer are in trade and are acquiring the goods or services for business purposes, the parties may expressly agree to exclude or limit the application of the CGA. This exclusion must be clearly expressed in the vendor agreement. Vendors must assess each customer relationship to determine whether the CGA can be excluded.

Under the Contract and Commercial Law Act 2017 (CCLA), the rules for when title (ownership) and risk pass from vendor to buyer in a New Zealand sale of goods contract are largely a matter of contract. The CCLA's sale of goods provisions (formerly the Sale of Goods Act 1908) provide default rules: for specific (ascertained) goods in a deliverable state, title passes when the contract is made; for unascertained goods, title passes when goods matching the contract description are unconditionally appropriated to the contract with the buyer's assent. However, these default rules are almost always varied by the vendor agreement. Most New Zealand vendor agreements include a retention of title (Romalpa) clause stating that legal title to the goods remains with the vendor until the purchase price has been paid in full. Without a retention of title clause, a buyer who becomes insolvent before paying may have the goods treated as part of their assets available to creditors. Risk typically passes on delivery — the buyer bears the risk of loss or damage after delivery. Vendors should ensure their retention of title clauses are registered on the Personal Property Securities Register (PPSR) under the Personal Property Securities Act 1999 to be effective against third parties.

A New Zealand vendor who is GST-registered must charge GST at 15% on all taxable supplies of goods and services made in New Zealand under the Goods and Services Tax Act 1985. The GST registration threshold is NZD $60,000 of taxable supplies in any 12-month period — vendors whose turnover exceeds this threshold must register for GST. A GST-registered vendor must issue a tax invoice to a GST-registered customer within 28 days of the supply, showing the vendor's GST registration number, the date of supply, a description of the goods or services, the consideration, and the amount of GST charged. The vendor must remit the net GST (output tax less input tax credits) to Inland Revenue on a monthly or bi-monthly basis, depending on the vendor's turnover. The vendor agreement should clearly state whether prices are quoted exclusive or inclusive of GST. Quoting prices exclusive of GST ('plus GST') is common in business-to-business contracts — the buyer pays the quoted price plus GST. The vendor must account for GST correctly to avoid penalties under the Tax Administration Act 1994.

A Vendor Agreement (New Zealand) does not legally require a lawyer in New Zealand, and individuals and businesses may draft and execute the document independently. The Companies Act 1993 does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified New Zealand lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The High Court of New Zealand has jurisdiction over disputes arising from this type of document, and Companies Office may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.