No-deal Brexit? What Legal Counsel needs to do to protect business contracts

posted in Contract Management

As the March 29th deadline to negotiate the terms of UK’s exit from the EU looms, it appears as though talks will go right up to the wire. Arguments over the exit terms continue and it looks like nobody knows for sure what is going to happen next. The chance of a no-deal Brexit is increasingly likely.

While many businesses are waiting for clarity, legal departments are in a unique position to demonstrate leadership by preparing the business for a no-deal Brexit scenario. Many legal experts are already weighing in on how legal teams can prepare for a no-deal Brexit with regards to their contracts, for example (and only scratching the surface):

  • Bird & Bird LLP recommend to audit commercial contracts to assess if a no-deal Brexit may effect enforceability. You may decide to renegotiate or amend them in order to address the implications of Brexit specifically.
  • Keystone Law suggests to include a Brexit clause in your new commercial contracts. It will be impossible to predict and provide provisions for every Brexit-related scenario, so you may just want to include a binding requirement to renegotiate certain aspects of the contract or as suggested by “change in law clause”, setting out provisions should a party incur delays or costs as a result of legislative change.
  • In the event of a no-deal Brexit, both the duties and formalities of Customs will come into force and the free movement of goods, services and people will be halted. Peeters Advocaten warns to check existing contracts to assess how a no-deal will impact labor law relations and trade agreements.

In order to communicate the impact a no-deal Brexit has on your contracts and take action, you will need to quickly access and audit contracts for key clauses. Legal departments that have all of their legal information organised digitally in a single place will be able to do this efficiently and accurately, without wasting time chasing down contracts. What’s more, in-house lawyers will need to assign tasks, update templates and establish new governance models. Teams that are supported by smart contract management tools, with clear processes, will certainly have the upper-hand over those using manual, or ad-hoc processes.

Click here to learn more about how you can organise all of your legal information, including contracts, generate insights, collaborate with the business and be more proactive when changes happen with effacts!

Download our “Preparing for Brexit” whitepaper for more on how in-house lawyers will need to answer urgent questions on how to approach Brexit.