Deal or no deal? With weeks to go until the end of the Brexit transition period, we still don’t know what’s going to happen, but there’s still a lot you can do now.
Brexit is likely to affect many commercial transactions. The effect of the UK’s ‘new start’—in the words of the Government—will be felt in many ways, both known and unknown. Brexit’s impact on the performance and profitability of individual contracts could be significant.
In this series of bite-size ‘Brexit countdown’ articles, we focus on the commercial implications of ‘Brexit 2.0’ in certain key areas and set out a high-level overview of the sort of things you should be thinking about with your teams and customers, and what you should be doing to get yourself Brexit-ready.
In this article we look at performance of your contracts.
What sorts of things should you typically be thinking about?
For each material contract, consider these key matters in particular:
- what will be the impact of Brexit on the ability to perform the contract in full and on time?
- is there likely to be a temporary inability to perform the contract (for example, pending newly-required permits or the imposition of a temporary embargo)?
- is there likely to be a permanent inability to perform the contract (for example, if a permanent embargo is imposed or it otherwise becomes permanently unlawful to perform the contract)?
- is any anticipated disruption or delay going to lead to liquidated damages or service credits?
- what is the likely effect on:
- service level agreements?
- key performance indictors?
- are there likely to be any increases in the costs of performance?
- who should bear additional responsibilities and costs?
- who should be responsible for compliance with, and costs of, changes in law?
Of course, every business will need to consider its own particular circumstances based on factors such as, in particular:
- its location
- the nature of its goods and services
- the business, economic and regulatory environment in which it operates
- the location of its key customers and suppliers, and
- the make-up of its workforce.
There is no one-size-fits-all approach to the analysis you need to do, but thinking about the commercial aspects above can help you decide what legal changes (if any) are necessary now and in the months to come.
At Shoosmiths, we have stayed close to Brexit developments. As always, we welcome any thoughts or comments from you and are ready to help you prepare for Brexit.
We are also producing briefings across all specialisms to keep you informed of legal changes anticipated in light of Brexit.
If you have any queries, do get in touch.
In the next article in this series, we’ll be looking at supply chains.