Brexit Clause Contract Example
New permits, consents, certificates, permits or licenses may be required to provide the Services or to deliver the Goods under the Agreement. For example, at the end of the transition period, a driving licence within the EU may be required to meet the requirements of a logistics contract. Make sure the agreement clearly states which party is required to obtain and pay for these additional permits. For these clauses to be effective and enforceable, it is important to clearly define the “triggering event”. Some commonly used trigger events we`ve seen as a result of Brexit contingency planning are: Consider whether a “Brexit clause” would be appropriate. The Brexit clauses are intended to address the consequences of Brexit on the respective agreement and to trigger a change in the rights and obligations of the parties. On the 21st. In February 2019, the English courts considered the issue of a Brexit argument in a dispute over a rental agreement. The Canary Wharf Group (as owner) has managed to obtain a statement that a uk withdrawal from the EU and/or relocation of the European Medicines Agency (“EMA”) (“as tenant”) does not release the EMA from its obligations under the lease, leaving the EMA responsible for lease obligations worth around £500 million. The EMA had argued that Brexit would thwart the lease as it radically changed the original reason for the signing. While it remains to be seen whether this decision will be appealed, it is indicative of the common law courts` narrow approach to the doctrine of frustration.
Can a party avoid contractual obligations that are more onerous or impossible to fulfil due to Brexit? Is there anything that can be done to comply with the new Brexit-proof treaties? For new contracts, however, it will be harder to argue that this possibility was unpredictable and for this reason, “Brexit clauses” have been included more frequently in trade deals in recent months. The parties often have a clause in their contracts whereby one or both parties may be released from the performance of the contract in whole or in part or is entitled to suspend performance or request an extension of the time limit if certain events occur. Since the vote on 23 June 2016, Brexit has been on the list of such events in many trade agreements. While the full impact of Brexit on trade deals may not be certain until the future EU-UK trade relationship becomes clear, steps can be taken now to protect your contractual position. The following checklist provides a non-exhaustive list of some of the most important issues and questions that should now be taken into account when reviewing existing contracts and negotiating new agreements: Remember that a Brexit clause can impact other terms of a contract, so these effects and any resulting changes elsewhere in the contract are taken into account and addressed during the introduction of the Brexit clause. must be. This may be particularly relevant if a Brexit clause is formulated in such a way that it can lead to the termination of the contract: a reference to the relevant provisions of the termination clause of the agreement is required. Ultimately, whether such clauses can be triggered by Brexit will depend on the wording of the respective clause. It is unlikely that the fact of Brexit per se would trigger such clauses if there were no specific wording to that effect. However, it is possible that the legal changes resulting from Brexit and the impact of those changes could trigger these clauses. Check how the fees are calculated. Is there flexibility in pricing? For example, if raw material costs go up, can you, as a supplier, increase fees or resist a price increase as a customer? As a supplier, it may be useful to include in the agreement assumptions defined on the basis of costs.
As a customer, you can look for an explicit clause that excludes a price increase due to factors or elements that could otherwise increase the cost of performing the contract. The usual dispute resolution clause on the contract probably won`t do much good, as arbitration or court proceedings are about telling which party is right, not about telling them how to deal with an unforeseen situation where neither is wrong and they can`t decide what to do with the problem. Hiring an expert is a possibility – if you`re willing to rely on that third party to make the decision for you. Alternatively, you can try mediation where an independent mediator will help you reach an agreement. Determine whether Brexit will result in changes in the tax treatment of payments under the agreement, such as changes in the way VAT is applied. • Import duties. If you are an importer or exporter, how will your contractual arrangements be affected when new import duties or duties are imposed? How will your agents or distributors in Europe be affected if new tariff barriers are imposed? We have some examples of clauses to address potential alternative solutions for companies trying to navigate the current Brexit landscape, an important consideration is the impact of events on their contractual relationships. This is a very real problem with potentially significant consequences. • Generally with definition of Brexit Given the uncertainties, even a definition of Brexit is not too easy, but we have included one with an alternative clause, usually formulated on Brexit.