The proposed withdrawal agreement included a transition period during which most EU law would continue to apply to the UK and agreements (including “mini-deals” in specific sectors) would be negotiated.

 “No deal” by contrast would mean that:-

 EU law will suddenly stop applying to the UK on exit day

  • Any UK action will only be effective if there is co-operation from the EU member states or from the EU institutions
  • Border checks and currency fluctuations may have a material adverse effect on existing commercial agreements.
  • New tariffs will apply

 

 Particular areas of concern are:-

 WTO rules on tariffs will immediately apply to both imports and exports

  1. A customs and regulatory border would arise between the UK and the EU (including between Northern Ireland and the Republic of Ireland) with new customs procedures to be followed for imports and exports and potential delays at ports.
  2. Data transfer.  The UK will become a third country for the purposes of GDPR when it leaves the EU.  If the European Commission are not satisfied that the UK can guarantee an adequate level of protection on the day after Brexit, new rules will have to be devised.
  3. Rights of EU citizens in the UK (and vice versa): free movement of persons will end and future rights will depend on the government approach (and that of the EU).
  4. EU funding:  UK companies will no longer be eligible to receive EU funding for projects.

 

In view of all this uncertainty, we recommend the inclusion of a Brexit clause in all contracts currently being negotiated, making provision for renegotiation in the event of a “no-deal”.

We are able to provide suggested clauses (both long form and short form) which could be considered for use.

In relation to existing contracts, if they become impossible to perform because of Brexit it may be possible to claim “force majeure” and terminate or suspend the contract.  In any event the likely issues need to be addressed and it is preferable if possible to negotiate a variation of the contract to include an appropriate Brexit clause.

 

If you could like any further information on the above, please contact Tim Jobson on 01785 711568 or tim@jobsonssolicitors.co.uk.