Member Article

Brexit boredom may lead to contract catastrophe warns lawyer

A corporate lawyer has urged businesses to review their current arrangements as Brexit boredom threatens the future viability of contracts.

Angela Kerry, associate solicitor at Emms Gilmore Liberson (EGL), has advised business leaders to guard against contractual complacency by taking steps to ensure that their terms are fit for purpose post-Brexit.

With less than 200 days to go until Britain leaves the European Union, Brexit continues to dominate the daily news agenda, creating what some believe is a potentially harmful combination of confusion and apathy that could lead to future contract catastrophe.

Angela said: “There is a genuine risk that Bexit boredom has set in and that could be an extremely dangerous mindset for any business. Business leaders urgently need to consider whether any contract they deal with will survive what happens in a post-Brexit world – and that covers everything from T&C’s and employment contracts to shareholder agreements.

“The details of our departure from the EU will have a significant bearing on the interpretation of contractual terms and perhaps even the enforceability of judgements. There will also be questions surrounding the commercial viability of contracts and whether their obligations can continue to be enforceable.

“What can business do to safeguard against these threats? I would strongly encourage all businesses to conduct a health-check and audit to review their current arrangements - particularly with third parties - and consider how Brexit may affect them.”

Whilst the government continues to negotiate the terms of Britain’s exit from the EU, calls for a second Brexit referendum and fears of a no-deal scenario remain.

Whilst the UK is not due to leave the EU until March 2019 and most EU legislation will continue to apply until 31st December 2020 – the so-called ‘transition period’ – it is thought that a no-deal situation would not provide enough adjustment time to allow for changes in laws or negotiation for trading deals.

Angela said: “It is wise to be prepared for the worst case scenario and that could well be a ‘hard’ Brexit or even a no-deal. Short-term contracts may be the answer until post-Brexit certainty is achieved or the inclusion of flexibility within contracts to allow parties to review and update as the consequences become clear.”

This was posted in Bdaily's Members' News section by paul king .