Finders Fee Agreements In New Zealand: Key Legal Considerations

You’ve probably been here before: someone introduces you to a new client, a potential investor, or a valuable supplier, and the deal happens faster than you expected.

Then comes the awkward part - “So… about my fee.”

That’s where a finders fee agreement comes in. If your business relies on referrals, introductions, or deal flow, having a properly drafted agreement can help you avoid disputes, set expectations early, and protect your commercial relationships from day one.

In this guide, we’ll break down what a finders fee agreement is, when you should use one, what to include, and the key legal pitfalls to watch out for in New Zealand.

What Is A Finders Fee Agreement (And When Do You Need One)?

A finders fee agreement is a contract where you agree to pay a person or business (the “finder”) a fee if they successfully introduce you to an opportunity - usually a client, customer, supplier, investor, or acquisition target.

In plain terms, it’s a way to say:

• “If you introduce me to X,”
• “and that introduction results in Y,”
• “then I’ll pay you Z.”

You’ll usually want a finders fee agreement if:

• You’re paying referral fees for leads, introductions, or deals.
• Your sales pipeline relies heavily on networks (common in professional services, recruitment, B2B, and startups).
• You’re doing partnerships where one party brings customers and the other delivers the work.
• You’re buying or selling a business and someone is connecting you with buyers, sellers, or brokers.
• You want clarity upfront to avoid “but I thought…” disputes later.

Even if you have a great relationship with the finder, putting it in writing tends to keep things smooth - especially once real money is on the line.

Finders Fee Vs Commission Vs Agency: Why The Legal Difference Matters

One of the biggest mistakes we see is businesses calling something a “finder” arrangement when, legally, it looks more like sales agency or brokering.

Why does that matter? Because the legal obligations, risk profile, and compliance requirements can change depending on what the person is actually doing for you.

A Finder (Typically)

A finder usually makes an introduction and steps back. They don’t negotiate the deal and they don’t represent you.

Example: someone introduces you to a potential wholesale customer. You handle the pitch, pricing, and contract.

A Sales Agent (Often More Ongoing)

An agent typically does more than introduce - they might promote your services, negotiate, and act as an ongoing sales channel.

If you’re setting up an agent relationship, you may need something more like a Sales Agency Agreement, because the scope, payment terms, and authority issues can be more complex.

A Broker / Intermediary (Often Deal-Focused)

A broker may actively put the deal together and negotiate terms between parties. Depending on the industry, there can also be licensing or regulatory requirements.

Tip: If your “finder” is doing any of the following, you should get legal advice before you pay fees or sign anything:

• negotiating on your behalf
• holding themselves out as representing your business
• making promises to the other party about your pricing, delivery, or terms
• handling money or deposits
• actively “closing” the deal for you

Getting the category right from the start helps you choose the right legal document - and avoid paying fees when the commercial outcome isn’t what you expected.

What Should A Finders Fee Agreement Include?

A strong finders fee agreement is really about clarity. It should spell out exactly what counts as a successful referral (and what doesn’t), how the fee is calculated, and when it’s payable.

Here are the clauses we typically recommend considering.

1. Who Are The Parties And What Is The “Introduction”?

This sounds obvious, but disputes often start with the basics:

• Is the finder an individual or a company?
• Who is your business contracting with (and paying)?
• Is the introduction a specific named client, or a category of leads?

It’s also important to define what counts as an “introduction”. For example:

• a meeting organised with a decision-maker
• a warm email intro that results in a meeting
• a referral that results in a signed contract

If you don’t define the trigger clearly, you can end up paying for leads that weren’t actually useful.

2. Scope: What The Finder Can (And Cannot) Do

To keep the relationship clearly in “finder” territory (not agency), you’ll usually want to specify that the finder:

• doesn’t have authority to negotiate or bind you
• must not represent themselves as your agent
• must not make statements or promises about pricing, availability, performance, or delivery

This is not just legal housekeeping - it reduces your risk of misunderstandings with the referred customer.

3. The Fee Structure: Percentage, Fixed Fee, Or Tiered Fee

Finders fees are commonly structured as:

• Fixed fee: e.g. $1,000 for a successful introduction that converts.
• Percentage of revenue: e.g. 10% of the first invoice paid.
• Percentage of contract value: e.g. 5% of the signed deal value (sometimes paid over time).
• Tiered fee: e.g. 5% up to $50,000, then 3% thereafter.

This is also where you should be specific about:

• Whether the fee is calculated exclusive or inclusive of GST
• Whether it applies to repeat business or only the first deal
• Whether it applies to upsells, renewals, extensions, or variations
• What happens if the customer cancels, doesn’t pay, or seeks a refund

If you’re building a broader commercial relationship with ongoing payments (rather than a one-off introduction), you might consider whether a Revenue Share Agreement is a better fit.

4. When The Fee Is Payable (And On What Conditions)

One of the most important decisions: do you pay the fee when the contract is signed, or when you actually get paid?

Many businesses prefer a “paid when paid” structure (fee only payable after you receive cleared funds). This helps your cashflow and reduces the risk of paying a finder when the deal doesn’t ultimately perform.

Whatever you choose, put it in writing. Otherwise you can end up with arguments like:

• “The deal was signed - pay me now.”
• “But they haven’t paid us and the project hasn’t started.”

5. Term, Exclusivity, And The “Tail Period”

Most finders fee agreements include:

• Term: how long the agreement lasts (e.g. 6 months, 12 months, ongoing).
• Exclusivity: whether the finder is your only referrer in a particular area (often not recommended unless it’s commercially justified).
• Tail period: if the agreement ends, do they still get paid for introductions made during the term that convert later?

The “tail” is a big one. It’s common to have a tail period of 3–12 months, depending on your sales cycle.

6. Confidentiality And Use Of Information

Referrals often involve sensitive business details: pricing, pipeline, strategy, and customer information.

At a minimum, your finders fee agreement should include a confidentiality clause, and in higher-value contexts you may also want a separate Non-Disclosure Agreement signed before sharing commercial information.

7. Privacy And Marketing Compliance (If Personal Information Is Shared)

If the finder shares personal information with you (like names, emails, phone numbers, or direct contacts), you’ll need to think about compliance with the Privacy Act 2020.

Practically, this means:

• only collecting personal information you actually need
• being transparent about how you’ll use it
• storing it securely and limiting access

Many businesses also need a Privacy Policy on their website, especially if they collect leads through a form or CRM.

8. Tax, GST, And Invoicing

In New Zealand, a finders fee is commonly treated as a service for tax purposes, but the right treatment can depend on the specifics of the arrangement and the finder’s tax status. GST may apply if the finder is GST-registered.

Note: This section is general information only and isn’t tax advice. If you’re unsure about GST or withholding obligations, it’s worth speaking with an accountant or tax adviser.

To avoid confusion, your agreement should deal with:

• whether the fee is plus GST (if applicable)
• what invoice details are required
• payment timeframe (e.g. 7 days, 14 days)
• what happens if there’s a dispute about entitlement

If the finder is an individual and you’re unsure whether the arrangement looks more like employment than contracting, it’s worth getting advice early - misclassification can create headaches.

Key Legal Risks With Finders Fee Agreements (And How To Avoid Them)

A finders fee arrangement can be straightforward - but only if you handle the risks upfront.

Here are the most common legal and commercial risks we see for small businesses in New Zealand.

Disputes About Who “Introduced” The Client

If multiple people claim credit for the same client, or if the client was already “in your pipeline”, you can end up stuck in the middle.

To reduce this risk, your agreement should cover:

• what happens if you already knew the customer (or were already in talks)
• how you confirm an introduction (e.g. written notice, email evidence)
• who is entitled if multiple parties are involved

Paying A Fee Even When The Deal Doesn’t Deliver

Sometimes the referred client signs but doesn’t pay, cancels early, or disputes the work. Without a properly drafted trigger clause, you may still be obligated to pay the finder.

Common solutions include:

• making payment conditional on you receiving money
• staging the finder’s fee over time
• including clawback provisions if the customer cancels within a defined period

Accidental Agency And Misrepresentations

If the finder makes statements to the customer about your business, you may be exposed if those statements are misleading or incorrect - particularly if the finder is acting with (or appears to have) authority from you. Whether your business is legally responsible will depend on the facts and how the relationship is presented.

In New Zealand, the Fair Trading Act 1986 can apply to misleading conduct in trade. Even if a finder acts outside what you intended, unclear boundaries can increase the risk of disputes.

That’s why the scope and “no authority” clauses are so important.

Competition And Conflict Of Interest

Finders often work across multiple businesses in the same industry. That’s not automatically a problem - but you should be clear about conflicts, particularly if:

• they’re referring leads to your competitors
• they have a financial interest in the other party
• they’re getting paid twice (by you and the customer)

You can address this with conflict disclosures and (where commercially appropriate) non-solicitation or limited restraint clauses.

DIY Templates That Don’t Match Your Real Arrangement

Templates often look fine until there’s a dispute - then you realise key details weren’t covered.

A finders fee agreement needs to match how your business actually operates: your sales cycle, payment model, refunds, customer contracts, and how you manage leads.

If you’re also putting in place documents for delivering the work (like an ongoing customer services contract), it’s worth having your Service Agreement aligned with your finder arrangement so the timing and payment triggers don’t clash.

Practical Tips For Using Finders Fee Agreements In Your Business

Once you’ve got the right agreement, the next step is using it properly. That’s where many businesses slip up - not because the contract is bad, but because the process isn’t consistent.

Get It Signed Before The Introduction Is Made

If you try to negotiate the fee after the finder has already shared the lead, you lose leverage and create confusion.

Even a short, signed agreement before the referral is made can save you a lot of back-and-forth later.

Use A Simple Process To Record Introductions

This doesn’t need to be complicated. For example:

• Require an email intro including all parties
• Confirm in writing that the lead is accepted and qualifies
• Record the introduction date in your CRM

When you’re busy, having a simple system prevents “he said, she said” disputes later.

Align Your Finder Agreement With Your Customer Contract

Imagine this: you pay a finder when a customer signs, but your customer contract allows a 30-day cancellation with refund rights.

That mismatch can cost you.

It’s worth checking that your fee trigger aligns with your real revenue, not just the excitement of a signed deal.

Be Clear On Who Owns The Relationship

If the finder stays involved, you should be clear whether:

• you communicate directly with the customer going forward, or
• the finder remains a point of contact (which can start to look like agency)

Clarity here helps avoid misunderstandings and protects the customer experience.

Check Whether Any Industry Rules Apply

Some sectors (like financial services, real estate, or regulated health services) can have restrictions on referral arrangements, commissions, or who can “procure” work.

If your finder arrangement touches a regulated activity, it’s worth getting tailored advice so you don’t accidentally build a model that breaches industry rules.

Key Takeaways

• Finders fee agreements help you pay for introductions and referrals on clear, enforceable terms, reducing disputes and protecting your cashflow.
• The legal structure matters - if the finder is negotiating or representing you, you may need something closer to an agency arrangement rather than a simple finder contract.
• A good finders fee agreement should clearly define the introduction, the success trigger, the fee calculation, and when payment is actually due.
• Key protections often include limits on the finder’s authority, confidentiality, conflict of interest terms, and a sensible “tail period” after termination.
• Privacy and compliance still matter - if personal information is shared as part of referrals, you should consider your obligations under the Privacy Act 2020.
• It’s worth getting the agreement tailored to your actual sales cycle and customer contracts, rather than relying on a generic template.

If you’d like help drafting or reviewing a finders fee agreement (or you’re not sure whether your arrangement is really a finder, an agent, or something else), reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.