Brexit clauses in contracts
14 Jan 2019 Material adverse change clause: these are specific clauses that may be included in your contract. Whether they apply in a Brexit scenario will be 4 Oct 2019 Brexit expert, Jacqui Bickerton, advises businesses to look at clauses allowing them to terminate non-profitable contracts in the event of a The significant benefits that have traditionally encouraged parties to make their commercial contracts subject to English governing law and the jurisdiction of the A "Brexit clause" is a contract clause which alters (or permits a party to require the alteration of) the parties' rights and obligations as a result of a defined event Hauliers involved in cross-border transport should consider inserting a 'Brexit Clause' into their commercial contracts, to avoid being locked into unaffordable
Do Contracts need a 'Brexit' Clause? Pete Maguire, Partner, Wright Hassall commercial team, specialising in the drafting and negotiation of outsourcing contracts
Here is an example of the type which has been used in commercial contracts: “Brexit” means that during the Term of this Agreement pursuant to Article 50 of the Treaty of Lisbon the UK leaves the European Union. “In the event of Brexit, if either Party considers that the consequences of Brexit materially increase the costs What is a Brexit clause? A “Brexit clause” is a contractual provision which triggers some change in rights/obligations as a result of a defined Brexit-related event. The clause therefore sets out two basic things: (a) the specific Brexit related event triggering the clause; and (b) the contractual consequences of that event. Commonly they cover: an agreement to renegotiate where additional resources are required due to a Brexit related change (e.g. materials inefficiencies clause) – to achieve clarity rather than a ‘back door’ final account and loss and expense and delay claims at the end of the project; Brexit proofing your contract: the choice of law to govern a contract will be unaffected by Brexit, including in the event of a ‘no deal Brexit’. Jurisdiction clauses and the recognition, and enforcement of judgements As mentioned above, the choice of law to govern a contract will be unaffected by Brexit. Such a clause might, for example, provide that: If performance or interpretation of contractual obligations is substantially affected by the fact of Brexit, or by changes in law arising from Brexit, If renegotiation occurs, the objective should be (unless the parties agree otherwise) to put Termination: Given the likely implications of Brexit (including possible currency fluctuations and a rise in the cost of raw materials and indexes), a party may seek to terminate a contract by relying on force majeure or material adverse change provisions. However, whether a party would be successful in terminating a contract on these grounds should be considered on a case by case basis, giving regard to the purpose of the contract and the facts of the matter. The following are some categories of consequences which might be provided for in a Brexit clause: A right for one, or either, party to terminate the contract. A process of negotiations between the parties with a view to agreeing the consequences A specific change in the effect of the
6 Dec 2019 Lawyers drafting contracts for firms conducting business across borders in different jurisdictions have found new ways to address these risks in
Commonly they cover: an agreement to renegotiate where additional resources are required due to a Brexit related change (e.g. materials inefficiencies clause) – to achieve clarity rather than a ‘back door’ final account and loss and expense and delay claims at the end of the project;
Do Contracts need a 'Brexit' Clause? Pete Maguire, Partner, Wright Hassall commercial team, specialising in the drafting and negotiation of outsourcing contracts
The following are some categories of consequences which might be provided for in a Brexit clause: A right for one, or either, party to terminate the contract. A process of negotiations between the parties with a view to agreeing the consequences A specific change in the effect of the
Part of the answer is a Brexit clause in your long term contracts. This especially applies to businesses with buyers, agents or distributors in Europe and to those who act as agents or distributors in the UK for suppliers based in the EU. Ryan Air have famously added one to theirs – for these very reasons.
Most contracts contain a 'force majeure' clause, which kicks in where certain unforeseen events occur and prevent one of the parties from performing its obligations under the contract. To be excused by a force majeure clause, you must be able to show that you would have been able to perform your obligations in the usual manner had that event not happened.
Termination: Given the likely implications of Brexit (including possible currency fluctuations and a rise in the cost of raw materials and indexes), a party may seek to terminate a contract by relying on force majeure or material adverse change provisions. However, whether a party would be successful in terminating a contract on these grounds should be considered on a case by case basis, giving regard to the purpose of the contract and the facts of the matter. The following are some categories of consequences which might be provided for in a Brexit clause: A right for one, or either, party to terminate the contract. A process of negotiations between the parties with a view to agreeing the consequences A specific change in the effect of the Brexit is upon us. What does it mean for governing law and dispute resolution clauses in international commercial contracts? A combination of an English law clause with a London jurisdiction/arbitration clause is a popular choice for international commercial agreements. BREXIT AND CONSTRUCTION CONTRACTS In terms of change in Statutory Requirements, clause 2.15.2.1 of the JCT D&B form provides that "If after the Base Date there is a change in the Statutory Requirements which necessitates an alteration or modification to the Works, such alteration or Most contracts contain a 'force majeure' clause, which kicks in where certain unforeseen events occur and prevent one of the parties from performing its obligations under the contract. To be excused by a force majeure clause, you must be able to show that you would have been able to perform your obligations in the usual manner had that event not happened.