With the countdown to Brexit quickly ticking away, Business Link Magazine invites a select number of the region’s business leaders to offer their thoughts.
Here we talk with Bhavandeep Sahota, Solicitor in the Corporate and Commercial team at Howes Percival LLP.
“The crushing defeat of Theresa May’s Brexit deal by the House of Commons has, according to some commentators, increased the possibility of the UK exiting the EU without a deal. It continues to remain uncertain what will happen post-Brexit and with such uncertainty it is important that businesses consider potential risks and protections, including assessing their commercial contracts to see if these can be Brexit-proofed.
“There are a number of things businesses can be looking at/considering to try and protect against Brexit, such as:
* Not relying on a “force majeure” clause as protection against the unknown of Brexit. This is a standard provision in many contracts and aims to relieve a contracting party from liability for a breach which is due to circumstances outside of its control- it is unlikely to be of any help for Brexit, unless it specifically refers to Brexit!
* Including an express “Brexit clause” in contracts, which could be drafted to cover a specific event with a specific consequence, or for termination of the contract.
* The risk of Brexit unintentionally triggering any rights of termination in contracts.
* The impact on cross border contracts, such as if the UK ceasing to be within the definition of EU will have any unintended impact.
* Including a clause covering exchange rate fluctuations.
* Key customers and suppliers and the potential impact of Brexit on these relationships.
* The impact of possible complex border/customs checks and resultant delays and costs.
* Whether employees and sub-contractors will have the right to continue working in the UK.
* Whether the business relies on any EU/European territory licences or consents to operate the business.
* Whether any customers or suppliers could face such significant trouble that they are at risk of insolvency rather than trading through any difficulties.
* The impact on intellectual property.
* The potential impact to the business of trading under the World Trade Organisation Rules and where trading on these terms will have an adverse impact.”