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Commercial transactions - a checklist for UK companies forming new contracts with their European counterparts
- AuthorPaul Herbert
The UK has left the Europe Union and the transition period ended on 31 December, a wide-ranging Trade and Cooperation Agreement is now in place . Whilst the principles of UK commercial contracts will not change the agreements made by UK based businesses with their European counterparts will need to be based on our new relationship.
This checklist sets out the key terms to look out for in your future contracts with companies based in the European Union:
- Location of the parties to the contract – consider if it would be beneficial to have both parties to the contract in the UK or EU.
- Territorial references in the contract must make it clear that the EU does not include the UK and vice versa.
- References to regulators and laws should be explicit and accurate.
- Tariffs will be more dynamic so you should consider pricing formulae to vary prices accordingly.
- Customs clearance will become a barrier clearance and their may be delays that affect delivery.
- Regulatory requirements may change in the medium term if there is divergence between the UK and EU. Your contract should address responsibility for conformity assessments.
- Use of UK or EU components might have an impact on rules of origin for tariff purposes.
- If a service, is the supplier still permitted to continue to supply the specific service?
- If personnel are needed to provide the service then your contract must address the loss of freedom of movement and the changing status of some professional qualifications.
- A temporary arrangement has been agreed allowing data to continue to be transferred from the EEA to the UK for the next four months. However, the UK may eventually become a third country for data export purposes. If personal data is to be transferred from the EU to the UK then mechanisms may be needed to allow those transfers to continue.
- You may wish to ease termination with a short notice period and specific Brexit termination clause.
- Disputes. English law and the English courts will be largely unaffected by Brexit but you should take advice in your counterparty’s country regarding enforcing these judgments after Brexit. As ever, specifically drafted Arbitration clause may help you avoid uncertain disputes.
If you would like further advice about your commercial contracts and the end of the transition period then please contact Paul Herbert, Partner and head of the Commercial team at Goodman Derrick at firstname.lastname@example.org or on +44 (0)20 7421 7922.
This guide is for general information only and should not be relied upon as providing specific legal advice.