Service Agreement Template NZ: Scope, Fees And Liability

Priya runs a small design studio in Wellington. A new client asks her to refresh their website, design social media templates and help with launch emails. Everyone is excited, so Priya starts with a short email saying the price is $8,000 plus GST.

Two weeks in, the client asks for extra landing pages, a new brand guide and weekend turnaround. Then they query the second invoice because, in their view, it was all part of the same project.

This is exactly where a clear service agreement earns its keep. A good service contract doesn't just look formal. It helps you set boundaries, get paid on time and avoid awkward conversations once the work is already underway.

Do You Need A Written Service Agreement In NZ?

Yes, you should use a written service agreement if your business provides services to clients, especially where money, deadlines, IP or ongoing support are involved.

A verbal agreement can still be binding in New Zealand, but it's much harder to prove what was agreed if things change later. Without a written agreement, you may struggle to recover unpaid invoices, charge for extra work or show that the client approved a particular scope.

A service agreement is useful for many businesses, including:

• consultants and professional service providers
• marketing, design and creative agencies
• IT services, software and SaaS implementation providers
• coaches, trainers and course creators
• maintenance services, cleaning and support service businesses

Your agreement should match how you actually work. For example, a one-off project agreement might focus on deliverables, milestones and acceptance. A monthly retainer might focus on included hours, response times, unused time and termination.

It's also worth remembering that your contract can't sit in a vacuum. If you deal with customers in trade, the Fair Trading Act 1986 applies to what you say about your services, pricing and results. If your client is a consumer, the Consumer Guarantees Act 1993 may apply to your services, and you usually can't contract out of those guarantees. For business-to-business services, you may be able to contract out of some Consumer Guarantees Act obligations if the agreement is in writing and it's fair and reasonable.

What Should A Service Agreement Template Include?

A service agreement template should include the commercial deal, the working rules and the legal protections that apply if something goes wrong.

A template can be a helpful starting point, but it shouldn't be treated as a finished document. Your risks will look different depending on whether you provide strategic advice, creative work, technical implementation, physical services or ongoing support.

Here's a practical fill-in outline you can use to plan your agreement before it gets tailored:

1. Parties: write the correct legal names, NZBNs if available, and contact details for both sides.
2. Services: describe what you'll do, what you'll deliver and what is outside scope.
3. Timeline: set start dates, milestone dates and any client approval deadlines.
4. Fees: state whether pricing is fixed, hourly, milestone-based, subscription-based or a mix.
5. Payment Terms: include deposits, invoice timing, due dates, GST, expenses and consequences for late payment.
6. Client Responsibilities: list what the client must provide, such as content, access, feedback or approvals.
7. Change Requests: explain how extra work is requested, quoted and approved.
8. IP Ownership: say who owns existing materials and when, if at all, new work transfers to the client.
9. Confidentiality And Privacy: cover sensitive business information and personal information.
10. Liability: set exclusions, caps and limits that are suitable for the deal.
11. Termination: explain how either party can end the agreement and what must be paid on exit.
12. Dispute Process: include a simple escalation process before either side takes formal steps.

You can attach a separate statement of work for each project if you work with the same client more than once. This keeps your main terms steady while letting you update the scope, timeline and fees for each new job.

How Do You Stop Scope Creep Before It Starts?

You stop scope creep by defining the services, exclusions and change process before you begin work.

Scope creep usually starts innocently. A client asks for one extra revision, then one extra meeting, then one extra deliverable. If your agreement doesn't say where the line is, it can feel uncomfortable to push back.

Your scope clause should be specific enough that a person outside the project could understand what is included. Instead of saying, social media support, say:

• 12 static Instagram posts per month
• 4 short-form video edits per month using client-supplied footage
• 1 monthly planning call of up to 60 minutes
• 2 rounds of revisions per content batch
• posting and comment moderation are excluded unless agreed separately

Exclusions matter just as much as inclusions. If you don't do copywriting, photography, legal review, paid ad management or after-hours support, say so clearly.

A Worked Example

Tane runs a brand studio in Auckland. He quotes $12,000 plus GST for a website refresh, payable 40% upfront, 40% after design approval and 20% before launch. The service agreement says the price includes 5 web pages, 2 rounds of design revisions and 1 round of copy changes.

Halfway through, the client asks for 3 extra landing pages and a downloadable guide. Because Tane's agreement has a change request clause, he sends a short written variation: $2,400 plus GST for the extra pages and $900 plus GST for the guide, with delivery extended by 10 business days. The client approves it by email before he starts.

That one clause turns a tense conversation into a normal commercial process.

How Should Fees, Deposits And Milestones Work?

Your payment clause should make it obvious when you invoice, when the client pays and what happens if payment is late.

There isn't one right payment structure for every service business. The best option depends on your cash flow, project length and how much work you do before the client sees the first deliverable.

Common fee structures include:

• Fixed Fee: useful for clearly defined projects where the scope is unlikely to change.
• Hourly Or Daily Rates: useful where the work is open-ended or depends heavily on client decisions.
• Milestone Payments: useful for larger projects with clear stages, such as discovery, design, build and launch.
• Monthly Retainers: useful for ongoing advisory, maintenance, managed services or agency services.
• Subscriptions: useful for recurring access, software support or packaged services.

If you charge a deposit, say whether it's refundable and in what circumstances. For example, you might state that the deposit is applied to the first milestone and isn't refundable once you've started work, except where the law requires otherwise.

Your agreement should also deal with expenses. If you might pay for stock images, printing, travel, software licences or subcontractors, say whether those costs are included in your fee or charged on top with approval.

For late payment, be clear and reasonable. You might include a right to pause work if invoices remain unpaid after a set number of days, charge reasonable interest if it was agreed upfront, or require outstanding amounts to be paid before final files are released. If you work with consumers, take extra care that your terms are fair and transparent.

Who Owns The IP In The Work?

It depends on your agreement, so your service contract should clearly say who owns the intellectual property before, during and after the project.

In New Zealand, copyright is generally governed by the Copyright Act 1994. Copyright can automatically protect things like written materials, designs, code, photos, videos, drawings and other original works. But ownership isn't always what the client assumes.

As a service provider, you may want to separate IP into three buckets:

• Your Pre-Existing IP: your templates, know-how, methods, software, frameworks, processes and reusable materials.
• Client Materials: the client's logos, content, data, brand assets and information they give you.
• Project Deliverables: the new work you create for that client under the agreement.

Your agreement can then say whether the client gets ownership of the project deliverables, or just a licence to use them. If ownership transfers, you can make the transfer conditional on full payment. This gives you practical leverage if the client wants the final files but hasn't paid the final invoice.

You should also think about portfolio rights. If you want to show the work on your website or in case studies, get permission in the contract rather than hoping the client will agree later.

Trade marks are separate from copyright. If you create a brand name or logo for a client, they may still need to check availability and apply through IPONZ if they want registered trade mark protection in New Zealand.

Can You Limit Liability In A Service Contract?

Yes, you can often limit liability in a New Zealand service agreement, but the clause needs to be clear, fair and appropriate for the work.

A liability cap is a clause that limits how much one party can claim from the other if something goes wrong. For example, your contract might cap your liability at the fees paid for the services in the 3 months before the claim, or at the total fees paid under the relevant statement of work.

What is reasonable depends on the deal. A $1,500 logo project doesn't usually justify the same risk settings as a $90,000 software implementation. You should think about:

• the value of the project
• the likely loss if something goes wrong
• whether you hold professional indemnity or public liability insurance
• whether the client is a business or consumer
• whether you handle personal information or confidential commercial information
• any promises you've made about outcomes, performance or compliance

Some risks are harder to limit. You generally shouldn't try to exclude liability for fraud, deliberate wrongdoing or obligations that the law doesn't let you contract out of. If your terms are standard form small trade contracts, the unfair contract terms rules in the Fair Trading Act 1986 can also matter. A one-sided or hidden limitation may not give you the protection you expect.

If you collect personal information, your agreement should work alongside your privacy practices. The Privacy Act 2020 requires you to handle personal information carefully, including around collection, use, storage, access and disclosure. If you suffer a notifiable privacy breach, you may need to notify the Privacy Commissioner and affected people.

What Else Should Your Terms Of Service Cover?

Your terms of service should cover the practical rules that keep the client relationship running smoothly after the project starts.

These clauses often get overlooked in basic contract templates, but they can make a big difference day to day:

• Approvals: say how long the client has to review work and what happens if they don't respond.
• Access And Materials: require the client to provide passwords, content, files and information on time.
• Subcontractors: let the client know if you may use trusted contractors or suppliers to help deliver the work.
• Confidentiality: protect pricing, business plans, client lists, technical information and non-public project details.
• Privacy: set out how personal information will be handled if either side shares it.
• Publicity: say whether you can use the client's name, logo or project results in your marketing.
• Termination: explain notice periods, payment for work done, handover and access to files.
• Electronic Signing: allow signing electronically where suitable, so you don't lose momentum waiting for paper copies.

If you're providing services as an individual contractor or engaging individual contractors to deliver client work, keep worker status in mind too. From 2026, Employment Relations Amendment Act changes introduce a contractor gateway test for some working arrangements. A client service agreement won't automatically decide whether someone is a contractor or employee, so your contractor arrangements should be checked separately if that issue is relevant.

The aim isn't to make your contract longer than it needs to be. It's to make the expectations clear enough that you and your client can focus on the work, not on arguing about the rules halfway through.

Key Takeaways

• A service agreement helps you lock down scope, fees, IP, confidentiality and liability before client work begins.
• Your scope should list both inclusions and exclusions, plus a clear process for approving extra work.
• Payment clauses should cover deposits, milestones, due dates, GST, expenses and what happens if invoices aren't paid.
• IP clauses should separate your existing materials, client materials and new deliverables created for the project.
• Liability caps can be useful, but they need to fit the deal and sit within New Zealand consumer, fair trading and privacy laws.
• A template is only a starting point. Your agreement should be tailored to how your business actually works.

If you'd like help with your service agreement, scope of work, payment terms and IP/liability clauses, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.