In our overview post on eWorld last week, we promised you the key takeaways from law firm CMS on Brexit, contract clauses and the supply chain. Partner Sam de Silva, adviser on the negotiation and drafting of complex commercial agreements and specialising in strategic IT and telecommunications, gave a 40-minute explanation (free advice basically) of what happens to existing cross-border contracts if the UK leaves the EU without a deal.
Unsurprisingly this was a well attended session, despite being the last of the day.
He talked about whether a Brexit clause would be worthwhile, and what would it achieve? An ‘if/then’ clause is subject to impact, and we still don’t know what the impact might be. Although it may be possible to specify certain consequences of some events, it’s difficult to specify all of them. And the parties may well attempt to renegotiate aspects of the contact, for example, feeling it is economically or logistically impossible to continue post Brexit, maybe due to extra costs and constraints that weren’t predicted when the contract was first negotiated. So basically, including a clause isn’t the ‘silver bullet’ to solve your Brexit problems. (That’s not to say you shouldn’t have standard provisions too, like force majeure, he emphasised.)