Brexit considerations for business contracts
February 12, 2018
With just over a year to Brexit, slated for 11.00 p.m. on 29 March 2019, it is time to ensure that your house is in order contractually. By ensuring that your business contracts are in the best possible shape and understanding the potential developments ahead of time, you can stay in control.
How to Brexit-proof your contracts:
We advise two related exercises: (i) review your existing contracts – at least those that may still apply beyond Brexit; and (ii) amend your standard terms of business and your approach to future bespoke contracts, to ensure that your company is as protected as it can be from the variances of potential Brexit outcomes.
Step 1: Review your existing contracts
Some contracts, such as one-off transactions to be completed this year, may not be impacted at all by Brexit; but contracts that are intended to endure beyond Brexit will need to take it into account, together with the changes that may come with it. But how they do so will depend on the business sector, the nature of the contract (whether it is a consumer contract, distribution agreement, etc.) and the objectives of the parties.
Use our top 10 considerations below as a starting point to help assess your existing contracts for vulnerability in the face of Brexit. You can then either flag those contracts which may have issues so that you can act quickly as events develop and/or laws change or seek to amend those contracts which won’t or may not work as intended post-Brexit.
Step 2: Make your new contracts as Brexit-proof as possible
Think ahead. By ensuring that all new contracts are drafted so as to best anticipate the changes that Brexit will bring, you will be in a stronger position to limit your exposure to the uncertainty. If you decide on your core approach now you will be in a stronger position to focus later on any unexpected aspects of Brexit.
In addition to amending your standard contract terms and/or standard boilerplate templates to anticipate Brexit issues, you need to upskill those in your business who are involved in negotiating contracts by increasing their awareness of potential pitfalls. Create a checklist of your company’s agreed position on key contractual points
which can then be shared with all those entering into or agreeing arrangements with third-parties on behalf of the business. Our top 10 considerations make a great starting point.
With just over a year to Brexit, slated for 11.00 p.m. on 29 March 2019, it is time to ensure that your house is in order contractually. By ensuring that your business contracts are in the best possible shape and understanding the potential developments ahead of time, you can stay in control.
How to Brexit-proof your contracts
We advise two related exercises: (i) review your existing contracts – at least those that may still apply beyond Brexit; and (ii) amend your standard terms of business and your approach to future bespoke contracts, to ensure that your company is as protected as it can be from the variances of potential Brexit outcomes.
Step 1: Review your existing contracts
Some contracts, such as one-off transactions to be completed this year, may not be impacted at all by Brexit; but contracts that are intended to endure beyond Brexit will need to take it into account, together with the changes that may come with it. But how they do so will depend on the business sector, the nature of the contract (whether it is a consumer contract, distribution agreement, etc.) and the objectives of the parties.Use our top 10 considerations below as a starting point to help assess your existing contracts for vulnerability in the face of Brexit. You can then either flag those contracts which may have issues so that you can act quickly as events develop and/or laws change or seek to amend those contracts which won’t or may not work as intended post-Brexit.
Step 2: Make your new contracts as Brexit-proof as possible
Think ahead. By ensuring that all new contracts are drafted so as to best anticipate the changes that Brexit will bring, you will be in a stronger position to limit your exposure to the uncertainty. If you decide on your core approach now you will be in a stronger position to focus later on any unexpected aspects of Brexit.In addition to amending your standard contract terms and/or standard boilerplate templates to anticipate Brexit issues, you need to upskill those in your business who are involved in negotiating contracts by increasing their awareness of potential pitfalls. Create a checklist of your company’s agreed position on key contractual pointswhich can then be shared with all those entering into or agreeing arrangements with third-parties on behalf of the business. Our top 10 considerations make a great starting point.
Related Professionals
