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Do you need a Brexit contract review?


Timeline

Whilst no agreement has yet been reached yet between UK Parliament and the EU member states, Brexit is fast approaching.

Our government has until a long stop date of 13th December 2018 to reach a deal with the other EU Member states. A transitional period of Brexit will then occur between the leaving date, 29th March 2019 and 31st December 2020. The UK will then, from 31st December 2020, be free to commence its’ trade deals with other countries. At present EU law will remain in place until December 2020.

What can you do now?

 Business clients who are entering into contracts which will extend beyond the above dates should consider ensuring appropriate “Brexit” provisions in those contracts, or risk be caught out by any changes brought about by Brexit.

 A “Brexit Clause” can help to minimise your exposure to risk and protect your position in respect of contracts which extend beyond the above dates.

 There are different ways we can add a Brexit Clause into your contracts. The two most commonly used are:

 

  1. Provisions that cover specific events – e.g. if currency exchange rates fluctuate, there is a price adjustment for goods.
  2. Provisions that allow for renegotiation and/or termination on certain triggers – e.g. if there is a change in regulation, imposition of a tariff, or your costs are increased due to Brexit – you can request renegotiation of the contract. If a deal cannot be achieved, you can terminate.

 

 Do you really need a Brexit Clause?

 Think about the following: 

What could happen to your supply chain?

  • Would the imposition of tariffs affect your pricing?
  • What would happen if your freedom to provide services in the EU is curtailed?
  • Will any restrictions on freedom of movement of EU citizens affect your workforce?
  • EU regulations will potentially no longer have direct effect in UK law – will this affect your warranties and ability to comply with any contractual obligations?
  • What would any currency exchange rate changes mean for your pricing?

We can review your contracts for you and help you draft Brexit Clauses to protect against uncertainty.

Please contact Shaun Owen or Louise Adams for more information.

Added: 05 Jul 2018 15:00


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