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Success Fee Consulting Agreement Template for New Zealand

A comprehensive legal agreement governed by New Zealand law that establishes the terms and conditions for consulting services where compensation is fully or partially based on achieving specific success criteria. The agreement details the scope of services, success metrics, fee calculation methodology, payment terms, and the rights and obligations of both parties. It incorporates New Zealand-specific legal requirements, including those under the Contract and Commercial Law Act 2017 and relevant tax legislation, while providing clear mechanisms for measuring and verifying success outcomes that trigger fee payments.

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What is a Success Fee Consulting Agreement?

The Success Fee Consulting Agreement is designed for professional service arrangements in New Zealand where payment is contingent on achieving specified outcomes. This document is particularly useful for consulting engagements in business transformation, financial advisory, and strategic projects where success can be objectively measured. It provides a framework for defining consulting services, establishing clear success criteria, and linking compensation to achieved results. The agreement complies with New Zealand legal requirements and is structured to protect both consultant and client interests while incentivizing performance. Typically used when traditional time-based billing is not optimal, this agreement type helps align consultant compensation with client objectives and project success.

What sections should be included in a Success Fee Consulting Agreement?

1. Parties: Identification of the consultant and the client, including full legal names, addresses, and company registration details if applicable

2. Background: Context of the agreement, brief description of the client's needs and consultant's expertise

3. Definitions: Key terms used throughout the agreement, including 'Services', 'Success Criteria', 'Success Fee', and 'Confidential Information'

4. Scope of Services: Detailed description of the consulting services to be provided

5. Term and Termination: Duration of the agreement, renewal terms, and circumstances for termination

6. Success Criteria: Clear, measurable criteria that determine when success fees become payable

7. Fees and Payment Terms: Structure of base fees (if any), success fees, payment timing, and invoicing requirements

8. Obligations of the Consultant: Consultant's duties, standard of care, and service delivery commitments

9. Obligations of the Client: Client's responsibilities, including providing information and cooperation

10. Confidentiality: Protection and handling of confidential information

11. Intellectual Property: Ownership and rights to work products and pre-existing IP

12. Limitation of Liability: Caps on liability and exclusions of certain types of damages

13. Dispute Resolution: Process for resolving disagreements, including mediation and arbitration procedures

14. General Provisions: Standard clauses including governing law, notices, and assignment

What sections are optional to include in a Success Fee Consulting Agreement?

1. Non-Competition: Restrictions on consultant's ability to work with competitors, used when sensitive industry knowledge is involved

2. Force Majeure: Provisions for unforeseen circumstances preventing performance, particularly relevant in long-term engagements

3. Insurance: Requirements for professional indemnity and other insurance, important for high-value or high-risk consulting

4. Data Protection: Specific provisions for handling personal data, required when processing sensitive information

5. Sub-contractors: Terms governing the use of sub-contractors, needed when the consultant may delegate work

6. Performance Reviews: Process for regular review of services, useful in long-term consulting arrangements

7. Exit Provisions: Detailed procedures for contract conclusion, important for complex engagements

8. Change Control: Process for modifying scope or success criteria, useful in dynamic projects

What schedules should be included in a Success Fee Consulting Agreement?

1. Schedule 1: Detailed Scope of Services: Comprehensive breakdown of services, deliverables, and timelines

2. Schedule 2: Success Fee Calculations: Detailed formula and examples of success fee calculations

3. Schedule 3: Key Personnel: List of key consultant team members and their roles

4. Schedule 4: Service Levels: Specific performance metrics and service standards

5. Schedule 5: Base Fee Schedule: Breakdown of any fixed or hourly fees separate from success fees

6. Appendix A: Progress Report Template: Standard format for progress reporting

7. Appendix B: Success Verification Process: Detailed process for verifying achievement of success criteria

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

New Zealand

Publisher

Ƶ

Cost

Free to use

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