If you’re running a business in New Zealand, it’s pretty normal to find yourself juggling relationships at the same time - a supplier on one side, a customer on the other, and maybe a referral partner or contractor somewhere in the middle.
That’s where a conjunction agreement can come in. It’s one of those documents people often hear about only when a deal is already moving quickly and everyone wants clarity on who’s doing what (and who gets paid).
This guide is a practical, plain-English explanation of what a conjunction agreement is, when you might need one, what to include, and the common mistakes to avoid. We’ve also refreshed this article so it reflects how these agreements are typically used in today’s business environment, including online and platform-based deals.
What Is A Conjunction Agreement?
A conjunction agreement is a contract used when two (or more) parties work together to introduce, coordinate, or support a deal - and they want to clearly set out:
- who is responsible for what;
- how leads or opportunities are handled;
- how fees or commissions are calculated and paid;
- when someone is (and isn’t) entitled to a payment; and
- what happens if the relationship ends or a dispute comes up.
You’ll most commonly see conjunction agreements used in industries where introductions and deal facilitation are part of the value - for example:
- real estate (e.g. conjunction arrangements between agencies or agents);
- business sales (introducers connecting buyers and sellers);
- recruitment (two firms cooperating on a placement);
- finance and broking (referrals and joint deal work);
- professional services (cross-referrals between advisors); and
- online marketplaces where leads and conversions can be tracked but ownership of a relationship is unclear.
Even though the word “conjunction” sounds formal, the idea is simple: it’s a written “we’re doing this together” agreement, designed to reduce confusion and protect everyone’s commercial position.
Is A Conjunction Agreement The Same As A Referral Agreement?
They’re related, but not always the same.
A referral agreement often covers a straightforward arrangement: Party A introduces a lead to Party B, and if it results in business, Party A gets paid.
A conjunction agreement is often used when the parties are more actively involved together in the deal - for example, both parties might communicate with the client, both might contribute to negotiations, or both might provide parts of the service.
If your arrangement is purely “introduce and step away”, a Referral Agreement may be the more natural fit. If you’re actually collaborating on the transaction or client relationship, a conjunction agreement can be a better way to document how that collaboration works.
When Do You Need A Conjunction Agreement In New Zealand?
You don’t always need a conjunction agreement, but it’s worth considering whenever money, lead ownership, or responsibilities could be disputed later.
Here are common situations where having this agreement in place can save you headaches.
You’re Sharing A Client Or Lead
If two businesses both have a connection to the same client (or both claim they introduced them), you can end up with arguments like:
- “I introduced them first.”
- “Yes, but I did the work that closed the deal.”
- “They were already in my database.”
A conjunction agreement can define:
- what counts as a valid introduction;
- how leads must be recorded (and by when); and
- how commission is treated if the lead was already known to one party.
You’re Collaborating On Delivery
Sometimes the “deal” isn’t just a sale - it’s a service being delivered jointly. For example, you might partner with another operator to deliver a project where the client sees both of you as part of the same team.
In that case, you’ll want clarity on:
- who invoices the client (and when);
- who carries what costs;
- what service standards apply; and
- who is liable if something goes wrong.
This often overlaps with what you’d cover in a Agency Agreement, especially where one party is acting on the other’s behalf.
You Want A Clear Commission Structure (Before The Deal Starts)
Handshake commission arrangements can work - until they don’t.
If the deal value changes, the scope grows, or the client renegotiates fees, people can end up with very different expectations about what the “agreed split” was supposed to mean.
A conjunction agreement lets you lock in:
- the commission rate (or fee split);
- what amount it applies to (gross vs net, ex GST vs inc GST);
- timing of payment (on signing, settlement, completion, or after payment is received); and
- what happens if there are refunds, chargebacks, or cancellations.
If you’re working with performance-based pay generally, it can also be helpful to ensure your approach is consistent with any Commission Agreement arrangements you use elsewhere in the business.
What Should A Conjunction Agreement Include?
There’s no single “one size fits all” conjunction agreement, because they’re very dependent on how you and the other party actually work together.
That said, most well-drafted conjunction agreements in NZ tend to cover the following core areas.
1. The Parties And The Purpose
Start with the basics:
- the full legal names of the parties (individuals and/or companies);
- what each party does (in practical terms); and
- what the agreement is for (e.g. introductions, collaboration, joint sale efforts, joint service delivery).
This sounds obvious, but it’s a common failure point - especially when people use trading names rather than legal entity names.
2. Scope Of Services And Responsibilities
This is where you avoid the “I thought you were doing that” problem.
Spell out what each party is responsible for, such as:
- client communications and who is the main contact;
- marketing and who pays for it;
- lead qualification steps;
- negotiations and approvals;
- documentation responsibilities; and
- handover and ongoing support.
If one party is effectively providing services to the other (or to the end customer under the other party’s brand), it may also make sense to align with your broader Service Agreement terms so you’re not running two different standards at once.
3. Commission, Fees, And Payment Triggers
This is usually the “heart” of the agreement.
Key points to clarify include:
- How is commission calculated? (Fixed fee, percentage, tiered structure, split arrangement.)
- What is the commission based on? (Contract value, settlement amount, net profit, first invoice only, recurring revenue.)
- When is commission earned? (On signing, on payment, on completion, on settlement.)
- When is commission paid? (Within X days of invoice, after the client pays, monthly reconciliation.)
- What evidence is needed? (Written introduction email, CRM record, signed form.)
Don’t forget GST: you’ll want to be very clear about whether amounts are GST inclusive or exclusive, and whether the party invoicing is GST-registered.
4. Exclusivity (Or Non-Exclusivity)
Some conjunction arrangements are exclusive (you can’t work with competitors for that type of deal), while others are open.
If exclusivity is intended, make sure you’re clear on:
- what products/services it covers;
- what territory or customer segment it covers (if any);
- the duration of exclusivity; and
- the consequences if it’s breached.
Where people get stuck is assuming exclusivity because of a friendly relationship - then being surprised later when the other party works with someone else.
Conjunction arrangements often involve sharing sensitive information like pricing, pipelines, client lists, and deal terms.
A good agreement will set out:
- what information is confidential;
- how it can be used (and not used);
- how long confidentiality obligations last; and
- how information must be returned or deleted at the end.
If you’re exchanging commercially sensitive information early, it may also be appropriate to have a standalone Non-Disclosure Agreement in place first (or build robust confidentiality clauses into the conjunction agreement).
And if personal information is being shared (for example, customer contact details), you’ll also want to keep the Privacy Act 2020 in mind and ensure your Privacy Policy and collection practices match what you’re actually doing.
6. Dispute Resolution And Exit
Even good partnerships can end - sometimes simply because business priorities change.
A conjunction agreement should cover:
- how either party can terminate (notice periods, immediate termination triggers);
- what happens to current deals in progress;
- whether commission is still payable after termination (and for how long);
- restraint / non-solicitation expectations (if appropriate and reasonable); and
- how disputes are handled (negotiation, mediation, courts).
This is one of the most important parts to tailor. The “right” approach depends on your sales cycle, average deal value, and how much effort each party typically contributes.
What Laws And Risks Should You Keep In Mind?
A conjunction agreement is primarily a contract, so general contract law principles apply. But there are a few NZ-specific legal and commercial risks you should keep on your radar.
Misrepresentation And Overpromising
If you’re introducing a client, you may be tempted to “sell hard” - but you need to be careful about what you promise.
Depending on the circumstances, statements made during negotiations can create legal risk if they’re misleading or not accurate (even if they weren’t intended to deceive). This can overlap with the idea of misrepresentation, and it’s one reason you should be disciplined about what gets said in writing to clients and partners.
Fair Trading Act 1986 (If Marketing Is Involved)
If either party is advertising services, making claims, or promoting outcomes, the Fair Trading Act 1986 can be relevant. In simple terms, you need to ensure marketing is not misleading or deceptive, and that key terms are not hidden.
This matters because conjunction arrangements often involve joint marketing (or one party marketing under the other party’s banner). If there’s a complaint, you don’t want confusion about who approved what and who is responsible for the message going out.
Privacy Act 2020 (If You’re Sharing Leads)
If the “lead” includes personal information (names, emails, phone numbers, job titles, notes about the person’s preferences), the Privacy Act 2020 is relevant.
Practically, you should ask:
- Did the individual expect their details to be shared with a partner?
- Have you disclosed that sharing in your privacy notices?
- Are you transferring the information securely and limiting access?
This doesn’t mean you can’t share leads - it just means you should do it thoughtfully and transparently.
Independent Contractor vs Employee Issues (If People Are Doing Work)
Some conjunction arrangements involve people doing ongoing work: follow-ups, account management, or client servicing.
If one party is effectively working inside the other’s business (set hours, under supervision, using internal systems), you should be careful you’re not accidentally creating an employment-like relationship. This isn’t always obvious at the start, but it can become a risk over time.
Where the arrangement includes individuals doing work, it’s worth checking that your contractor paperwork (or Employment Contract documents, if applicable) are consistent with how the relationship operates in real life.
Common Mistakes To Avoid With Conjunction Agreements
Conjunction agreements are meant to prevent disputes - but if they’re vague or rushed, they can do the opposite.
Here are some common issues we see (and what you can do instead).
Leaving Commission Terms “Open”
“We’ll work it out later” feels flexible, but it’s where conflict usually starts.
Instead, decide upfront:
- the rate;
- the base amount;
- the trigger event; and
- the payment timing.
If it needs to be flexible, you can build in a clear mechanism (for example, a tiered approach or a written variation process).
Not Defining What Counts As An Introduction
This is a big one in lead-based businesses.
Make sure the agreement answers questions like:
- Is an introduction valid if the client was already known to the receiving party?
- Does the introduction need to be in writing?
- Does the introducer need to attend a meeting or do follow-up work?
- How long does the introduction “last” before it expires?
Ignoring What Happens After Termination
If your sales cycle is long, you can easily end up with a “tail” problem: deals that convert months after the relationship ends.
To avoid arguments, your agreement should cover post-termination commission rights clearly (including any time limits and reporting obligations).
Using A Generic Template That Doesn’t Match Your Deal
It’s tempting to grab a template online, swap names, and call it done.
The problem is that conjunction arrangements are usually very specific. If the document doesn’t match how you actually operate, it can be hard to enforce - and it can create gaps that expose you to risk.
Getting the agreement properly drafted (or at least reviewed) is one of those “do it once, do it right” steps that helps protect you from day one.
Key Takeaways
- A conjunction agreement is a contract used when two or more parties collaborate on a deal or introduction and want clarity on responsibilities, lead ownership, and payment.
- These agreements are common where commissions or shared client relationships are involved, including business sales, recruitment, finance, and professional services.
- A well-drafted conjunction agreement should clearly cover scope of work, commission calculations, payment triggers, confidentiality, privacy considerations, and what happens if the relationship ends.
- If you’re sharing personal information as part of lead generation, you should keep the Privacy Act 2020 in mind and make sure your privacy practices are consistent.
- Most disputes come from vague commission terms, unclear “introduction” definitions, and failing to plan for post-termination deals.
- Because conjunction agreements are highly deal-specific, using a generic template can leave you exposed - it’s usually worth getting the document tailored or reviewed.
If you’d like help drafting or reviewing a conjunction agreement (or you’re not sure which document best fits your arrangement), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
