Consulting Agreement (New Zealand)

A Consulting Agreement in New Zealand records the consulting work to be provided, the fees, the service standards, and each party's obligations between the provider and the client under the Companies Act 1993.

The CCLA consolidated eleven previously separate commercial statutes into a single thorough Act, covering contractual remedies, misrepresentation, privity, sale of goods, electronic transactions, and frustrated contracts. All commercial consulting arrangements in New Zealand are subject to the CCLA, and a well-drafted consulting agreement should reflect the parties' obligations under that Act.

The Consumer Guarantees Act 1993 (CGA) is central to any consulting agreement involving a consumer client. The CGA implies mandatory guarantees into every contract for the supply of services to a consumer: that the services will be carried out with reasonable care and skill (s 28), that the services will be fit for any particular purpose made known to the supplier (s 29), that the services will be completed within a reasonable time where no time is agreed (s 30), and that the services will be provided at a reasonable price where no price is agreed (s 31). These guarantees cannot be excluded when services are supplied to a consumer. However, section 43 of the CGA permits parties to contract out of the consumer guarantees where both parties are acting in trade, provided the contracting-out is in writing and is fair and reasonable.

The Fair Trading Act 1986 (FTA) prohibits misleading and deceptive conduct in trade and applies to all representations made by both the consultant and the client in connection with the consulting engagement. Both parties must confirm that their representations about the services, pricing, qualifications, and capabilities are accurate and not misleading.

GST implications must be addressed in every New Zealand consulting agreement. Under the Goods and Services Tax Act 1985, consulting services supplied by a GST-registered consultant are taxable supplies subject to GST at 15%. The GST registration threshold in New Zealand is NZD $60,000 in taxable supplies over any 12-month period. The agreement must clearly state whether the quoted fee is inclusive or exclusive of GST.

Intellectual property ownership is a critical issue in consulting engagements. Under the Copyright Act 1994, copyright in original works created by an independent contractor vests in the contractor (the author), not the commissioning client. This means that without a written IP assignment clause, the client may not own the intellectual property in reports, strategies, designs, or software created by the consultant. A consulting agreement should expressly assign or licence all work product IP to the client, or clearly state which party owns what.

Data protection obligations are governed by the Privacy Act 2020, which requires any agency (including businesses and consultants) that collects, holds, uses, or discloses personal information to comply with the 13 Information Privacy Principles (IPPs). Consultants who handle personal information on behalf of their clients must comply with the IPPs and notify the client of any privacy breach that has caused or is likely to cause serious harm.

A written Consulting Agreement is essential whenever a business or individual in New Zealand agrees to provide professional advisory or specialist consulting services to a client for payment. Without a written agreement, the terms of the arrangement will be determined by reference to emails, oral discussions, and implied terms — a situation that routinely gives rise to disputes over scope, fees, deliverables, and intellectual property ownership.

You should use a Consulting Agreement when a business engages a management consultant, strategy adviser, IT consultant, financial adviser, HR consultant, marketing consultant, engineering consultant, or any other professional on a project or retainer basis. The agreement defines the scope of the advisory engagement, the deliverables, the fees, and the obligations of each party before work begins.

A consulting agreement is particularly important where the engagement involves the creation of original materials, reports, strategies, software, or other intellectual property. Under the Copyright Act 1994, copyright in a work created by an independent contractor vests in the contractor (the consultant), not the commissioning client. Without a written IP assignment or licence clause, the client may not own the work product and may be unable to use it freely after the engagement ends.

Creative professionals — web developers, graphic designers, copywriters, photographers, and UX researchers — should always have a consulting agreement in place before beginning client work. The agreement should address whether the client will own the IP in the deliverables or receive a licence to use them.

Technology companies and IT consultants providing software development, managed IT services, or digital transformation advisory services to New Zealand clients need a consulting agreement that addresses data processing obligations under the Privacy Act 2020, service levels, deliverables, and the ownership of code and data.

Consultants and advisers who provide strategic advice or recommendations need clear limitation of liability clauses to manage their exposure to claims for indirect or consequential loss. Under the Contract and Commercial Law Act 2017, parties in business-to-business consulting engagements have broad freedom to allocate risk through limitation and exclusion clauses, subject to the requirements of the Fair Trading Act 1986 and the Consumer Guarantees Act 1993.

Startups and scale-up businesses engaging advisers and mentors on flexible terms — whether by the hour, by the day, or by the project — should formalise those arrangements with a consulting agreement to confirm both parties have clear expectations about scope, deliverables, fees, and the ownership of any intellectual property created during the engagement.

A well-drafted New Zealand Consulting Agreement should include the following key provisions to provide thorough legal protection and comply with applicable New Zealand law.

Parties and NZBN — Identify each party by their full legal name and, for business entities, their New Zealand Business Number (NZBN). Companies registered under the Companies Act 1993 must use their registered name (ending in Limited or Ltd). The NZBN is a 13-digit identifier issued by the New Zealand Business Register.

Nature of Relationship — The agreement should clearly state that the consultant is engaged as an independent contractor and not as an employee. This distinction is critical for tax purposes, entitlement to benefits, and the application of the Employment Relations Act 2000. The consultant should be responsible for their own income tax, ACC levies, and GST obligations.

Scope of Services and Deliverables — Define the advisory services with precision. A vague or broad scope description is the most common cause of consulting disputes. Identify specific deliverables, advisory outcomes, and any reporting or attendance obligations. Include a clear change order process requiring written agreement before any work outside the agreed scope is commenced.

Fees, GST, and Payment Terms — State the fee structure (fixed project fee, hourly rate, daily rate, monthly retainer, or milestone-based), whether GST at 15% is included or additional, and the payment terms. The agreement should specify the invoicing procedure and the number of days within which invoices must be paid. Under the Goods and Services Tax Act 1985, a GST-registered consultant must issue tax invoices showing the GST number and the amount of GST charged.

Consumer Guarantees Act 1993 Compliance — The agreement must acknowledge the consumer guarantees implied by the CGA (sections 28-31) and must not exclude them where the client is a consumer. Where both parties are in trade, the agreement may include a contracting-out clause under section 43 of the CGA.

Fair Trading Act 1986 — The agreement should include mutual warranties that neither party has engaged in misleading or deceptive conduct in connection with the agreement, consistent with the obligations imposed by the FTA.

Intellectual Property — Determine and document who will own the intellectual property in the deliverables. Under the Copyright Act 1994, copyright in work created by an independent contractor vests in the contractor (the author), not the commissioning client. A written IP assignment clause is required if the client is to own the IP.

Confidentiality and Privacy — Include a mutual confidentiality clause and address the consultant's obligations under the Privacy Act 2020 with respect to personal information. The Privacy Act applies to all agencies that collect, hold, use, or disclose personal information and requires compliance with the 13 Information Privacy Principles.

Governing Law — The agreement should be governed by the laws of New Zealand, with reference to the CCLA 2017, CGA 1993, and FTA 1986. Each party should submit to the non-exclusive jurisdiction of the courts of New Zealand. The forms-legal.com Consulting Agreement (New Zealand) provides a ready-to-use template that meets New Zealand legal requirements.