Brexit and contracts: what else?

//Brexit and contracts: what else?

Brexit and contracts: what else?

On 16 January 2017, accordingly to the United Kingdom’s vote to leave the EU, Theresa May stated at a Press Conference at Lancaster House that the UK will be moving forward with Brexit. This speech, the most important she has ever made since becoming prime minister, was intended to make clear, once for all, the post-Brexit action plan, which will primarily be based on the UK’s control over the immigration and on leaving the jurisdiction of the European Court of Justice, whose implications are related to the withdrawal from:

  • EU single market, which guarantees the EU’s four freedoms: free movement of goods, services, capital and people.
  • Custom Union, which refers to the EU common trade area and means that goods already within EU can circulate and cross borders freely.

By considering the changed commercial landscape, these decisions are surely destined to create relevant legal consequences for anyone doing business in or with a UK or EU Company.

At this point, we always hear about many important issues related to the interpretation and performance of contracts which, one a side, have been drafted at the time in which EU law formed part of English law, on the other side, will be performed upon UK’s leaving: what will happen whether the UK government decides that some or all EU derived laws will not be applied anymore? How will a contract governed either wholly or party by European law be interpreted? How will the potential changes in custom, employment and taxation affect the contract? What will happen in case of missed trade deal between EU and UK?

As understandable, such issues assume big importance and may easily provoke misunderstanding in interpretation and performing of those contracts, and entitle therefore a contracting party to look for possible ways to exit contracts that are no longer required or profitable.

In this perspective, companies with existing contractual commitments in the UK and EU should be pondering a contractual strategy aimed at reviewing, renegotiating, amending any potential misleading part of such contracts, on the purpose of avoiding potential risks bound with the so-called Brexit’s effect.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Avv. Davide Palazzo – Palazzo Law Boutique.

By | 2017-09-06T13:28:36+00:00 July 2nd, 2015|Uncategorized|0 Comments

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