But what will leaving the EU mean for your commercial contracts ?
50 % of British goods are destined for the EU according to official trade statistics
Brexit means Brexit
But what will leaving the EU mean for your commercial contracts ?
Simon Portman Solicitor , Marks & Clerk
Simon specialises as a commercial contract lawyer for technology companies . He works for clients in the electronics , bioscience , defence , software and nanotech industries , advising companies from small startups to big multi-nationals as well as individuals , public bodies and charities
Brexit means Brexit , but what that will mean in practice is still taking shape . Anyone doing business with the rest of the EU , or the UK but relying on customers and suppliers who deal with the rest of the EU , should be keeping an eye out for ramifications . These include the effect on the rights and obligations the business has assumed in its commercial contracts . Furthermore , not only will Brexit need taking into account when new contracts are entered into . Existing contracts may also need revisiting and amending . Most of them , after all , will have been drafted and negotiated when the prospect of the UK leaving the EU was remote .
defining europe Most commercial contracts such as licences or distribution agreements which confer rights in a defined territory often , if that territory is Europe , define it with reference to the Member States of the EU or the EEA . At some point they won ’ t include the UK ( assuming , as appears likely , the UK leaves the EEA when it leaves the EU ):
• For existing contracts granting rights in the EU , the parties need to decide whether the UK will continue to be included as part of the contract territory post-Brexit .
• New contracts can provide for whether the EU as defined will include or exclude the UK at the outset and , if it is to be included , whether , when the UK leaves the EU , it should remain part of the contract territory or not .
For the sake of convenience and because it will remain a key territory after Brexit , many contracting parties will probably wish to keep the UK within the contract ’ s definition of Europe whatever happens to its relationship with the rest of the continent . However , in case other Member States ever leave too , it would be advisable for contracts to provide for what happens to any country which quits the EU and not restrict this contingency plan to the UK .
rights and obligations Brexit will mean the following changes :
• Restrictions on the movement of people , meaning key staff may be more difficult to secure or keep .
• The UK diverging ( albeit gradually and incrementally ) from the EU in legal and regulatory terms , means one-size-fitsall products and services may no longer be possible in some cases and the UK may go its own way in areas like VAT , data protection and competition law .
• Possibly higher trade barriers between the UK and the EU .
• The pound ’ s value increasing and decreasing in turn as this story continues to play out .
• Changes in the competition regime governing exhaustion of rights and parallel importation .
All of the above could have a significant effect on the suitability and attainability of existing contractual provisions relating to matters like development and delivery times , pricing , royalties , minimum purchase targets and product liability .
Read online at : ukspa . org . uk / breakthrough spring 2017 | UKSPA breakthrough | 21