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A Service Agreement, otherwise known as T&Cs, is a contract between your business and your customer. In 2025, having a robust and clear Service Agreement is more critical than ever to safeguard your arrangements in today’s dynamic commercial environment.
It can take the form of a formal contract your customer needs to sign, an online tick box confirmation, or even a document attached to your invoice and agreed to by payment. With the increasing trend to digital transactions, ensuring your Service Agreement is accessible and legally sound is paramount.
Here at Sprintlaw, we have drafted hundreds of Service Agreements for businesses from all walks of life. This updated guide covers what you need to know about Service Agreements and how they fit into your business in New Zealand in 2025. For further tips on structuring your contracts, you might also want to review our What Is a Contract? article.
Top Reasons Clients Want A Service Agreement
We continue to notice that many clients contact us for a Service Agreement even after years in business. In 2025, the main reasons remain:
- A customer has refused to make payment and there is no contractual clause detailing the consequences of non-payment.
- There is an argument around the scope of services, with the customer expecting additional work beyond what was originally agreed without an appropriate price adjustment.
- Disputes arise over service delivery, costing the business valuable time and money to resolve.
- Concerns about liability, in an era of heightened regulatory scrutiny and evolving risk standards.
- The business wants to secure its intellectual property – a growing priority in our increasingly digital marketplace.
For businesses that are short on time, repeatedly chasing up payments and reiterating business policies can be frustrating. A well-drafted Service Agreement streamlines these processes and can nip potential disputes in the bud, similar to how our Contract Review service helps businesses avoid costly legal errors.
10 Things To Include In A Service Agreement
1. Scope
What exactly is the service or job? For example, if you’re installing blinds in a customer’s home and they later request additional work not covered by the original agreement, include a clear provision that details extra costs for any change in scope. This means you don’t need to draft an entirely new contract for every variation. You might also find our Guide to Business Terms & Conditions useful for outlining the scope comprehensively.
2. Term
How long will the contract last? Set out whether the arrangement is a one-off transaction or denotes a continuing business relationship. Be sure to include start and end dates, and clarify any conditions under which the contract may be extended or terminated early. This clarity helps avoid ambiguity down the line.
3. Payment
Clearly stipulate when payment is due, the accepted methods of payment, and any penalties for late payments – including interest if applicable. Does the agreement require a deposit at the time of booking? This information should be prominently placed at the top of your Service Agreement to ensure there is no misunderstanding from the outset. For more detail, our Service Agreement Best Practices resource is a handy reference.
4. Warranties
Specify what warranties, if any, apply to the goods or services you are providing. Are you offering more than the minimum outlined in New Zealand’s Consumer Guarantees Act? Additionally, if third-party goods are involved, mention any limitations or extended warranties that may apply. Updated legal guidelines in 2025 suggest being as explicit as possible to avoid any legal ambiguities.
5. Customer’s Obligations
Clarify what is required from your customer to ensure a smooth service delivery. This may include providing access, timely feedback, necessary approvals (for example, during staged software development), and supplying passwords or information essential to perform your service. Ensuring your customer’s obligations are clearly set out helps prevent delays and potential disputes.
In certain cases, you may also need your customer to comply with relevant laws when using provided equipment – a point reviewed in our Legal Requirements For Starting A Business guide.
6. Intellectual Property
If you are providing bespoke material or creative work, it is essential to clarify ownership of intellectual property. This clause should also address any third-party intellectual property rights. Businesses are increasingly protecting their brands and creative output, so seek guidance from our Intellectual Property services to ensure your rights are fully protected in 2025.
7. Liability
Outline what happens if something goes wrong or if an injury occurs. For instance, if you’re a professional photographer and equipment failure causes you to miss capturing an important moment, or if you’re hiring out equipment that is later damaged or stolen – who is liable? Detailing your liability protections and how insurance factors into the equation is key. Our Consumer Guarantees and Liability article offers further insights.
8. Dispute Resolution
This section should clearly outline the steps you and your customer should take in the event of a dispute. For example, you may require mediation or arbitration before any court proceedings, in line with New Zealand’s contemporary dispute resolution practices as outlined in our contract law resources.
9. Termination
Define the circumstances under which either party can terminate the contract and the consequences of such termination. For instance, if you are renting out machinery, your Service Agreement might require the prompt return of equipment and payment of any outstanding rentals until the termination date. Up-to-date termination provisions help avoid future conflicts.
10. Force Majeure
The Force Majeure clause should outline what events, such as natural disasters (earthquakes, floods) or public health emergencies like COVID-19, relieve parties from their contractual obligations. Given the recent global events and updated guidance for 2025, it is more important than ever that this clause is precise in defining what constitutes a force majeure and the subsequent steps each party must take.
Additionally, businesses may benefit from including a clause addressing digital disruptions or cyber incidents, an emerging risk in today’s online commercial landscape. For guidance on drafting such provisions, see our Privacy Policy and Confidentiality Clause resources.
What Next?
It is essential that your Service Agreement complies with New Zealand’s Consumer Guarantees Act, is clear and unambiguous, and is presented in a straightforward format easily understood by your customer. In 2025, with business practices evolving rapidly, having a tailored, robust Service Agreement not only protects your interests but also adds professionalism to your engagements.
Here at Sprintlaw, we specialise in drafting precise Service Agreements customised to your industry needs. We’ve assisted hundreds of businesses – from tech startups to established service providers – and continue to update our practices in line with the latest legal developments. Don’t hesitate to reach out to us on 0800 002 184 or via email at [email protected] for a free, no-obligation consultation. You might also find our Why a Lawyer Should Review Your Contract guide beneficial.
By ensuring your Service Agreement is up-to-date and comprehensive, you can focus on growing your business while we help you manage and mitigate legal risks. Remember, clarity in your contractual terms today can save significant time, cost, and hassle tomorrow.
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