Brexit could affect contract rights

Leamington Spa, UK: Brexit uncertainty leaves UK businesses in a precarious position with regards to contracts with EU-based entities and the practicality of existing obligations within them, says Lindsay Ellis, partner at law firm Wright Hassel.

“In light of the possible terms of our exit, it would be prudent for UK organisations to consider the likely impact on existing contracts and take account of Brexit in proposed contracts, due to be signed,” Ellis says.

“There is a lot to consider, from who pays for any tariffs imposed to the cost of managing customs clearance and the cost of delays caused, let alone whether a contract contains territorial references to the EU – this could be a very messy divorce and planning is essential.

“Existing contracts might offer some provision to mitigate risks.
“However, business should consider whether including a Brexit clause that may never be needed, is a far safer approach to potential problems, when a defined event can trigger changes in the rights and obligations of both parties would be appropriate.

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