Check company contracts or risk a Brexit breakdown
Check your contracts now or they could be void in a matter of weeks, a leading lawyer has warned.
Graham Mead, a partner and head of the commercial litigation team at Prettys Solicitors, said any business that traded in Europe in any capacity or referred to the EU in their contracts, needed to review documents ahead of Brexit and make changes or risk undermining their agreements.
“Although the UK left the European Union on 31st January 2020, we have been in a transition period ever since – with this due to end on 31 December 2020,” he said.
“During the transition period the UK has been treated as a member of the EU with EU law being applicable but when the transition period comes to an end there are relevant concerns for contracts already in place as well as for upcoming contracts, if a deal is not reached.”
Mr Mead said companies should look at all their commercial contracts to gauge how Brexit may affect them.
Top priority should be given to whether the contractual term will run beyond 31st December 2020 – and at the nature of the contract and whether it it is affected by our leaving the EU.
“For example, some contracts refer to member states and will treat the UK as a member of the EU. If a deal is not struck, then the UK’s position is that it isno longer a member and different rules are likely to apply.”
“If the new position is not incorporated, then it could possibly substantially undermine the contract. Similarly, as a member state, often you may only need one office within the EU. If the UK is no longer an EU member, then it could mean that an office will be needed in the EU, or even in each member state within which you have dealings.”
“If you receive personal data from the EEA (EU plus Iceland, Lichtenstein and Norway), you will need to check that you are GPR compliant. Standard contractual clauses may assist with this.”
“There is little indication of which laws might be rewritten to a significant degree in the near future and which are most likely to remain virtually unchanged from their pre-Brexit form,” he said.
“This means that if a contract is drafted on the assumption that obligations and restrictions currently imposed by EU-derived legislation will continue to be in effect in much the same way for years to come, there could be problems.”
Mr Mead recommends businesses change the wording of contracts to alleviate any potential for confusion and seek legal advice if required.
