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A Contingency Contract sets up a binding agreement that only takes effect when specific conditions are met. For example, a business might sign a lease that only starts if they secure council approval for their planned renovations, or a contractor might agree to perform work only after resource consent is granted.

Under NZ contract law, these agreements help parties manage uncertainty by clearly spelling out what needs to happen before obligations kick in. This makes them especially useful for property deals, construction projects, and business transactions where timing and external factors matter. The key is that all conditions must be clearly defined and achievable within a reasonable timeframe.

Use a Contingency Contract when you need to secure an agreement now, but critical pieces aren't yet in place. For example, a property developer might use one to lock in contractors while waiting for council consent, or a business buyer might commit to a purchase pending due diligence results.

These contracts work especially well in NZ's commercial property market, where timing and external approvals often affect deals. They're also valuable for business sales, construction projects, and any situation where you need to coordinate multiple parties or approvals. The agreement protects everyone by clearly stating what conditions must be met before the deal becomes active.

• Condition Precedent: These contracts only take effect after specific requirements are met, like obtaining resource consent or securing funding
• Condition Subsequent: The agreement remains valid unless certain events occur, such as failing to meet performance targets
• Time-bound Contingencies: Sets clear deadlines for meeting conditions, common in property transactions under NZ law
• Multi-party Contingencies: Links multiple agreements together, requiring all parties to meet their conditions before any contracts activate
• Performance-based: Triggers payment or obligations based on reaching specific milestones or outcomes

• Property Developers: Use contingency contracts to secure deals while awaiting council approvals or finance
• Business Owners: Protect their interests during mergers, acquisitions, or major business transactions
• Lawyers: Draft and review agreements to ensure conditions are clear, enforceable, and protect client interests
• Commercial Landlords: Structure lease agreements dependent on tenant improvements or zoning changes
• Contractors: Secure future work while managing dependencies like resource consent or project funding
• Local Councils: Review and approve conditions related to development or zoning requirements

• Define Conditions: List all events or requirements that must occur before the contract activates
• Set Timeframes: Establish clear deadlines for meeting each condition and overall contract completion
• Identify Parties: Gather full legal names, addresses, and authority details of everyone involved
• Document Dependencies: Note any external approvals, permits, or consents needed
• Specify Outcomes: Detail what happens if conditions are or aren't met
• Draft Agreement: Use our platform to generate a legally-sound document that includes all required elements
• Review Details: Double-check all dates, conditions, and party information for accuracy

• Party Details: Full legal names, addresses, and signing authority of all involved parties
• Contingent Conditions: Clear, specific description of events that must occur for contract activation
• Timeframes: Deadlines for meeting conditions and consequences of missing them
• Performance Terms: Detailed obligations once conditions are met
• Exit Clauses: Circumstances allowing parties to withdraw if conditions aren't met
• Governing Law: Explicit statement that NZ law applies
• Dispute Resolution: Process for handling disagreements about condition satisfaction
• Execution Block: Proper signature spaces with witness requirements

A Contingency Contract differs significantly from a Contingency Fee Agreement in both purpose and structure. While both deal with future uncertainties, they serve distinct functions in NZ law.

• Core Purpose: Contingency Contracts create binding agreements that activate when specific conditions are met, while Contingency Fee Agreement structures payment terms based on outcomes, typically in legal services
• Timing of Effect: Contingency Contracts delay the entire agreement until conditions are satisfied, whereas Fee Agreements are active immediately but tie payment to results
• Risk Distribution: Contingency Contracts spread risk among parties regarding future events, while Fee Agreements primarily shift financial risk to the service provider
• Common Usage: Contingency Contracts appear in property deals and business transactions, while Fee Agreements are common in litigation and professional services