By James Dent
Wilson Browne Solicitors
THE problem with this version of Deal or No Deal is that there's no cash prize at the end of it and nobody who keeps offering to buy you out.
No, this version is all about 'the big day', as at 23.00 local time on 29 March 2019, the UK is scheduled to leave the EU. Even now few (if any) have much idea just what's in store and whilst we can't see in to the future, we can take steps to protect ourselves from some of the uncertainty.
5 tips for your Brexit preparation
With the continued uncertainty as to what Brexit deal the government will strike with the EU or even if there will be a no-deal Brexit, many businesses are left in limbo as to what strategic preparations they can make to ensure their business continues running as smoothly as possible. The old adage 'plan for the worst and hope for the best' is a useful stance to take.
When carrying out a strategic review of any contracts, whether or not the other party is in another EU country and whether you are looking at goods or services, here are some areas to consider.
When looking at a pricing mechanism in a contract, you should think about the effects of disruption of supply or other market shocks and who will ultimately bear the cost. Something all contracts should be reviewed for is who will suffer the cost of any tariffs which might be imposed on goods and services. If you enter forward contracts, which will continue after 29 March 2019, then you will need to carefully consider if there are any circumstances where prices could be varied.
Although particularly important if contract prices are in Euros, any exchange rate variation could have a significant effect if pricing is in US Dollars. Businesses need to consider whether they need protection against fluctuations, whether by hedging or including a clause which allows for price negotiation (or failing that termination) in the case of an exchange rate variation outside of a fixed range.
With continued uncertainty as to whether there will be an increase in waiting times at border crossings for customs checks, delivery provisions should be assessed. There might be provisions for rejection of the goods or cancellation of the contract if delivery does not take place on or by a certain date. Depending on payment terms, the clock often starts running for payment from delivery, so any delays could have an impact on cash flow. Similarly, if delivery is on a 'Free On-Board' basis, then any delays will be borne by the customer.
This type of provision allows a party not to be in breach of contract if events take place outside of either party's control, which delays performance. Usually there is a set timeframe in which the party who would be in breach of contract has to remedy the situation. This could give some protection and help smooth over disruption at boarders or possibly if there are issues with one of the party's suppliers.
Material Adverse Change - A Brexit Clause
If you are entering into new contracts, a material adverse change clause might be worth considering, as this provides for renegotiation or possibly termination of a contract if there is a change of circumstances which significantly alters the commercial deal between the parties. Thought should be given as to how this clause is used, whether this should specifically refer to Brexit or whether it should be broader to cover more general material adverse changes.
You may be suffering from acute Brexit fatigue but assuming you're not and that you want to be prepared for the big day, contact James Dent at Wilson Browne Solicitors on 0800 088 6004.