Doing business across borders can be exciting - new customers, new suppliers, bigger markets.
But international deals also come with a unique legal twist: when something goes wrong, it’s not always clear which country’s rules apply, where you can enforce your rights, or what the contract actually means in practice.
This 2026 update reflects how international contracting is commonly done today: digital signings, cross-border SaaS and e-commerce, remote contractors, and multinational supply chains. The good news is that if you set up your contracts properly from day one, you can reduce risk and do business with much more confidence.
Below, we’ll walk you through the key things you should know before you sign (or send) an international contract as a New Zealand business.
What Makes An International Contract “International” (And Why Does It Matter)?
An “international contract” is usually any agreement where:
- the parties are based in different countries; or
- the goods/services are supplied across borders; or
- performance happens in another country (for example, offshore manufacturing or overseas delivery); or
- payment, tax, or compliance obligations involve another jurisdiction.
That might sound broad - because it is. Many everyday agreements become “international” the moment you:
- sell online to customers in Australia, the US, the UK, or the EU
- engage an overseas developer, designer, or consultant
- import products for resale in New Zealand
- license software or IP to a foreign company
- sign a distribution or reseller deal offshore
Why does it matter?
Because international contracts raise issues that a standard “NZ-only” agreement often doesn’t deal with well, including:
- Jurisdiction and enforcement: if you need to sue, where do you do it, and will the decision be enforceable?
- Applicable law: what country’s laws govern the contract?
- Currency and tax: who bears bank fees, withholding tax, or GST/VAT/sales tax issues?
- Different legal expectations: terms that are “normal” in NZ can be interpreted differently overseas.
- Data and privacy: cross-border personal data handling can trigger strict requirements.
International contracting isn’t about making things complicated - it’s about being clear upfront so you’re not left guessing later.
Which Country’s Law Applies (And Where Will Disputes Be Heard)?
If you take one thing away from this article, make it this: international contracts should clearly state the governing law and the dispute resolution process.
Without that, you can end up in a messy situation where both sides argue:
- “my country’s laws apply”, and
- “any dispute has to be handled in my courts”.
Governing Law (Choice Of Law)
This clause answers: which legal system will be used to interpret the contract?
For a New Zealand business, common options include:
- New Zealand law (often preferred if you’re supplying from NZ or want consistency)
- the other party’s local law (sometimes required if they have strong bargaining power)
- a neutral law (less common for SMEs, but sometimes used in bigger deals)
Picking New Zealand law doesn’t magically prevent overseas disputes - but it does provide a familiar legal framework and reduces uncertainty when interpreting key clauses.
Jurisdiction (Where Disputes Are Heard)
This clause answers: which courts (or tribunal) have authority to hear a dispute?
You might choose:
- exclusive jurisdiction (only one place can hear disputes)
- non-exclusive jurisdiction (disputes can be brought in more than one place)
In practice, “exclusive” can be cleaner, but it needs to be commercially realistic. If you’re contracting with a large overseas customer, they may insist on their home courts.
Arbitration Vs Court Proceedings
Many international contracts use arbitration because it can be:
- more private than court
- faster (depending on the forum)
- easier to enforce internationally in many situations
But arbitration is not always cheaper, and it needs careful drafting (including seat of arbitration, rules, and language).
It’s worth getting advice before agreeing to a dispute clause you don’t fully understand - especially if it effectively forces you to litigate offshore.
What Terms Should Every International Contract Include?
International contracts usually need all the “standard” commercial clauses - plus a few extra ones that matter more once borders are involved.
Depending on the deal, you might be using a Service Agreement, supply terms, a distribution arrangement, or a software agreement. The key is making sure the essentials are actually covered for your specific cross-border risks.
Clear Scope, Deliverables, And Acceptance
Be specific about:
- what is being delivered (and what isn’t)
- timeframes and milestones (including time zones)
- testing/acceptance criteria (especially for software and creative deliverables)
- who provides inputs and approvals, and by when
This is where disputes often start - not because someone is dishonest, but because expectations weren’t aligned.
Payment, Currency, And Late Fees
Don’t leave payment terms vague. Cover:
- currency (NZD, AUD, USD, etc.)
- who pays bank transfer fees and intermediary bank fees
- payment timing (on invoice, upfront deposit, staged payments)
- late payment interest and recovery costs
If your business relies on steady cashflow, these details can be the difference between a manageable dispute and a major financial hit.
Tax And Withholding Issues
Cross-border payments can trigger withholding tax obligations in some countries.
Even if you’re being paid from overseas, the overseas customer may be required under their local rules to withhold a percentage unless paperwork is provided (and this can come as a nasty surprise if your contract assumes you’ll receive the full amount).
It’s often sensible to address in the contract:
- whether amounts are “gross” or “net” of withholding
- who is responsible for tax documentation
- whether invoices must include specific tax information
Tax advice is often needed here - but your contract should at least allocate the risk clearly.
Intellectual Property (IP) Ownership And Licensing
If you’re creating anything (code, designs, content, branding, product formulations), your contract should be crystal clear about IP.
Common approaches include:
- assignment: the client owns the IP created (often after full payment)
- licence: you keep ownership but grant a right to use (common for templates, pre-built tools, or SaaS)
- split IP: each party keeps their background IP, and new IP is treated separately
Where this is missed, you can end up in a situation where the overseas party assumes they “own everything” - while you assume you can reuse your work in future. Getting it in writing avoids that awkward (and expensive) fight later.
Confidentiality And Data Protection
Most international deals involve sharing commercially sensitive information - pricing, customer lists, product specs, roadmap plans.
A tailored Non-Disclosure Agreement (or confidentiality clause inside the main contract) helps you control:
- what information is confidential
- how it can be used
- how long confidentiality lasts
- how information must be stored and returned
If personal information is involved, New Zealand’s Privacy Act 2020 may apply, and overseas privacy frameworks might also affect you depending on where your customers are located. Many businesses choose to have a clear Privacy Policy in place as part of good compliance hygiene, particularly if you sell or provide services online.
Limitation Of Liability (And The Real-World Negotiation)
Limitation of liability clauses matter even more internationally, because an overseas dispute can be expensive to defend.
Common liability positions include:
- capping liability to fees paid (or a multiple of fees)
- excluding indirect or consequential loss
- carving out certain liabilities (for example, IP infringement, confidentiality breach, fraud)
There’s no one-size-fits-all cap. What’s “reasonable” depends on what you’re supplying, the price, and the risk profile.
If you’re asked to accept “unlimited liability” in an international contract, treat it as a serious red flag and get advice before signing.
How Do NZ Laws Affect International Deals (Even If The Other Party Is Overseas)?
A common misconception is: “If the other party is overseas, NZ laws don’t matter.”
In reality, NZ law can still apply to you as a New Zealand business - and overseas laws can also apply depending on where your customer is and how you trade.
Fair Trading And Consumer Guarantees Risks
If you advertise to, or sell to, customers (including online), you still need to be careful about misleading claims and the way you describe your products or services.
In New Zealand, the Fair Trading Act 1986 prohibits misleading or deceptive conduct in trade. If you’re selling to consumers in NZ, the Consumer Guarantees Act 1993 may also apply (for example, guarantees around acceptable quality and services carried out with reasonable care and skill).
Internationally, similar consumer protection rules can exist - sometimes stricter than what you’re used to. That’s why contracts and website terms should match what you actually deliver, and why marketing claims should be checked carefully.
Privacy And Cross-Border Data Flows
If your contract involves customer data, employee data, or even user analytics, you should address:
- who is responsible for security measures
- whether data can be transferred offshore (and under what safeguards)
- how breaches will be handled
- what happens when the contract ends
This is especially relevant for SaaS businesses, agencies using overseas subcontractors, and NZ companies outsourcing work offshore.
Employment Vs Contractor Issues
International hiring is common - but you need to be clear whether the person is:
- an employee (which can trigger employment obligations), or
- an independent contractor (where you’re buying services, not employing them).
If you’re engaging overseas contractors, the contract should define deliverables, IP ownership, confidentiality, payment, and local compliance expectations. For NZ-based engagements, you may also want to consider an Employment Contract for employees, or a tailored contractor agreement where the relationship is genuinely contracting.
Misclassifying workers is a common risk area, and it gets more complex once multiple jurisdictions are involved.
How Can I Reduce Risk Before I Sign An International Contract?
International contracts aren’t just about the document - they’re about the full deal setup. A little diligence upfront can save you a lot of pain later.
1. Check Who You’re Really Contracting With
It sounds basic, but it matters:
- is the other party a company, an individual, or a partnership?
- what is their correct legal name and registration number?
- who is signing, and do they have authority?
- are you contracting with the parent company, or a subsidiary?
If the “customer” is a newly formed overseas entity with no assets, enforcing the contract later might be difficult even if you win.
2. Don’t Assume Templates Will Protect You
Many international disputes start with a “quick template” agreement that:
- doesn’t match the real commercial arrangement
- was drafted for another country’s legal system
- has conflicting clauses (especially around IP and payment)
- doesn’t deal with cross-border enforcement at all
It’s fine to start with a base - but international contracts usually need tailoring to your business model, your risk tolerance, and the country you’re dealing with.
3. Make Sure The Contract Matches Your Operating Reality
Before you sign, ask yourself:
- Can you actually meet the delivery timeframes given shipping and customs delays?
- Do you have the right insurance for the territory?
- Are your subcontractors allowed under the contract?
- Does the contract require compliance with policies you’ve never seen?
A contract can look “fine” legally but still be a commercial trap if it commits you to obligations you can’t practically meet.
4. Plan For The Relationship Ending
This is the part most people skip - until it’s too late.
International contracts should clearly cover:
- termination rights (for breach, convenience, insolvency)
- notice requirements
- final payments and handover obligations
- return/deletion of confidential information and data
- post-termination restraints (where appropriate and enforceable)
If you’re entering a longer-term arrangement like a distribution or reseller deal, you’ll also want to think about how renewals work, and how you protect your brand and pricing strategy over time.
5. Get The Structure Right Before You Go Global
International contracting often goes hand-in-hand with growth: bigger suppliers, larger customers, and larger risk exposure.
If you’re expanding quickly, it may be time to review whether your business structure is still fit for purpose, and whether your internal governance documents support investment, new shareholders, or group structures.
For example, many growing businesses consider adopting a Company Constitution and putting a Shareholders Agreement in place so decision-making, exits, and funding are clearly managed as the business scales.
This isn’t “extra paperwork” - it’s part of building legal foundations that can support international growth.
Key Takeaways
- International contracts need more than standard “NZ-only” terms, because cross-border deals raise extra issues around governing law, dispute resolution, enforcement, tax, and data handling.
- Your contract should clearly state which country’s law applies and where disputes will be resolved - otherwise you can end up arguing about the rules before you even argue about the problem.
- Make sure payment terms, currency, delivery expectations, and acceptance criteria are written clearly, especially when time zones, shipping, or offshore teams are involved.
- Intellectual property and confidentiality should be dealt with upfront so you don’t lose control of key assets or sensitive information once it crosses borders.
- New Zealand obligations (including the Fair Trading Act 1986 and Privacy Act 2020) may still affect you, and overseas rules can also apply depending on where and how you trade.
- International contracts are rarely the place for DIY templates - getting terms tailored to your deal is one of the best ways to protect your business from day one.
If you’d like help reviewing, drafting, or negotiating an international contract, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
