Brexit-Induced Contract Uncertainty: What Can You Do Today?
The guessing game is over. Brexit is official.
Pretty soon, the United Kingdom will no longer be a member of the European Union. Which means that lawyers around the world are scratching their heads about what it means for their clients, their firm or their company. Is it cause for panic, or a storm in a tea-cup?
One way to answer this question is to focus on what Brexit means for your existing contractual relationships. Which contract terms just became a whole lot fuzzier, and does it really matter? Some have suggested that ambiguity around “English” governing law will complicate dispute resolution. Others think that force majeure provisions may trigger a wave of unexpected contract termination. But a more immediate concern may be the impact of Brexit on territorial rights and restraints in commercial agreements.
If a distribution agreement gives your company exclusive rights in the “European Union”, you may soon be losing a big chunk of your market. If you have “European Union” non-compete language with a vendor, they might soon be free to set up shop in London. And if you’ve agreed not to move data or assets outside of the EU, your British operations may no longer qualify. In all scenarios, the first step is to find these potential problems and assess how painful they are. From there you can devise a strategy of renegotiating, repapering or restructuring before Brexit officially kicks in.
Of course, those of you with Exari Contracts have already done all this analysis and can enjoy a few days off at the beach. Perhaps a nice beach somewhere in Europe, while you still have the chance.