Brexit Contractual Pitfalls

With the prospect of a no deal Brexit now looking increasingly likely, businesses must urgently reflect on the potential impact on their commercial contracts.

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Brexit Contractual Pitfalls

Brexit Contractual Pitfalls

With the prospect of a no deal Brexit now looking increasingly likely. Businesses must urgently reflect on the potential impact on their commercial contracts, in particular, any contracts which involve importing or exporting.

If, as appears likely, the movement of goods in and out of the UK may suffer delay, what impact might this have on contractual liabilities?

Whilst a well-drafted force majeure clause might often assist for “governmental acts” or unexpected port delays, force majeure clauses are, by their definition, there to provide some temporary relief in response to unexpected occurrences. It seems unlikely therefore that a force majeure clause could be relied on for what is clearly now a foreseeable event.

The next question would then be is time of the essence in the contract? If it is not, then delay of itself will not be a breach of the contract and port delays would not invoke contractual penalties.

Conversely, if time is specifically stated to be of the essence, such delays can put the other party to the contract in breach and open to a potentially substantial claim for damages.

These are just a couple of the contractual pitfalls that could impact businesses in the immediate aftermath of Brexit. We would recommend that you take legal advice to understand fully the risks to your business prior to October 31st.

If you are concerned with how the changes could affect your contracts, please contact Giles Searby on giles.searby@keebles.com or call Giles on 0114 252 1423

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