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Fee Agreement
I need a fee agreement for a freelance graphic designer who will be working on a project basis, with payment terms specifying a 50% upfront deposit and the remainder upon project completion. The agreement should include provisions for revisions, a confidentiality clause, and a termination clause with a 2-week notice period.
What is a Fee Agreement?
A Fee Agreement is a legal contract that spells out how much you'll pay for professional services and when those payments are due. In New Zealand, these agreements are particularly common between lawyers and clients, as required by the Lawyers and Conveyancers Act 2006, but they're also used by consultants, accountants, and other service providers.
Beyond just listing prices, a proper Fee Agreement outlines payment terms, describes the scope of services, and explains what happens if payments are late. It protects both parties by preventing misunderstandings about costs and creates clear expectations from the start. Many NZ professional bodies recommend getting these agreements in writing before work begins.
When should you use a Fee Agreement?
Use a Fee Agreement before starting any professional service relationship, especially when working with lawyers, accountants, or consultants in New Zealand. It's particularly important when the services involve complex work, extend over multiple months, or require significant financial commitment. The Lawyers and Conveyancers Act makes these agreements mandatory for legal services.
Get your Fee Agreement in place when negotiating service terms, switching providers, or expanding the scope of existing work. Having clear documentation helps avoid disputes about costs, prevents scope creep, and gives both parties confidence about payment expectations. For regulated professions like law and accounting, it also ensures compliance with professional standards and consumer protection rules.
What are the different types of Fee Agreement?
- Retainers Agreement: Sets up ongoing monthly payments for regular access to services, common with law firms and consultants
- Success Fee Agreement: Links payment to specific outcomes or milestones, often used in business deals or litigation
- Referral Agreement: Outlines compensation for client referrals between professionals
- Introduction Fee Agreement: Specifies payment terms for connecting parties to business opportunities
- Mutual Referral Agreement: Establishes reciprocal referral fees between two businesses or professionals
Who should typically use a Fee Agreement?
- Legal Professionals: Law firms and individual lawyers must provide Fee Agreements under NZ regulations, especially for ongoing client relationships
- Professional Service Providers: Accountants, consultants, and business advisors use these to set clear payment terms with clients
- Clients: Individuals and businesses receiving professional services review and agree to fee structures and payment schedules
- Practice Managers: Oversee the creation and management of Fee Agreements within professional firms
- Industry Regulators: Monitor compliance with fee disclosure requirements, particularly in legal and financial sectors
How do you write a Fee Agreement?
- Service Details: List all specific services covered, including timeframes and deliverables
- Fee Structure: Document your rates, payment schedule, and any additional charges or disbursements
- Party Information: Gather full legal names, contact details, and business registration numbers if applicable
- Payment Terms: Specify payment methods, due dates, and consequences for late payments
- Scope Limits: Define what's not included to prevent misunderstandings
- Professional Rules: Check your industry's regulatory requirements for fee disclosures in NZ
- Document Generation: Use our platform to create a legally-sound agreement that includes all required elements
What should be included in a Fee Agreement?
- Party Details: Full legal names, business details, and contact information for all parties
- Service Description: Clear outline of professional services, including scope and limitations
- Fee Structure: Detailed breakdown of charges, rates, and payment schedules
- Payment Terms: Due dates, accepted methods, and late payment consequences
- Duration: Agreement start date and termination conditions
- Dispute Resolution: Process for handling disagreements under NZ law
- Confidentiality: Terms for handling sensitive client information
- Signatures: Space for dated signatures from all parties
- Compliance Notice: Required disclosures under the Lawyers and Conveyancers Act
What's the difference between a Fee Agreement and a Contingency Fee Agreement?
A Fee Agreement differs significantly from a Contingency Fee Agreement in several key ways. While both deal with professional compensation, they serve different purposes and suit different situations in New Zealand's legal landscape.
- Payment Structure: Fee Agreements typically specify fixed rates or hourly charges paid regardless of outcome, while Contingency Fee Agreements only require payment upon achieving specific results
- Risk Distribution: Standard Fee Agreements place payment obligation on the client regardless of success, whereas Contingency arrangements share risk between provider and client
- Common Usage: Fee Agreements are widespread across professional services, while Contingency arrangements are mainly used in litigation or success-based business deals
- Legal Requirements: Fee Agreements must detail all charges upfront under NZ consumer protection laws, while Contingency agreements need additional provisions about success criteria and percentage calculations
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