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Businesses Urged To Speak To Suppliers Ahead Of Brexit

Commercial Lawyer Says Time Is Running Out

04.12.2018

David Shirt, Press Officer | 0161 838 3094

Leading commercial lawyer and Brexit specialist, Winston Green, is urging businesses to open up meaningful dialogues with their suppliers now ahead of Brexit whatever form it may take.

Winston Green, a partner at Irwin Mitchell in London, says that businesses should be asking suppliers for their Brexit plans in order to determine if they are appropriate and whether the supplier is alive to the risks that are associated with the different potential exit scenarios.

Expert Opinion
“A review of high risk contracts with EU based suppliers, or suppliers whose businesses are highly dependent on EU trade, is essential in order to determine if the agreements could withstand likely changes brought about by Brexit.

"There are a host of issues that business should be looking into including deliver implications. For example, it is important to review arrangements and, depending on the likely Brexit scenarios, consider whether the relevant supplies will be directly or indirectly affected. It is also worth considering whether, and to what extent, customs checks and issues with surrounding infrastructure may cause delays, particular in relation to ‘just in time’ supply chains.

“We would also advise clients to look at the potential financial impact on suppliers and whether or not a contingency plan should be drawn up against the possibility that particular suppliers’ businesses could suffer significantly as a result of Brexit. It is important to have considered whether a particular contract could become uneconomical for the other side and/or whether they may become unable, unwilling or delayed in the performance of their obligations.

“Fighting with a supplier for whom a contract has become uneconomic can sometimes be more expensive and time consuming than agreeing an orderly exit and entering into alternative arrangements. This is not to say exits are straightforward or frictionless and one should be extremely cautious about how one goes about exercising any termination rights in a contract as poorly managed terminations can backfire.

“There may be a broad range of solutions available to you given enough time to negotiate and plan. If any negotiations are going to be required, it’s advisable to get these underway as soon as possible to avoid the clock running out.”
Winston Green, Partner

Irwin Mitchell recently published a report into the economic impacts of Brexit. The report can be downloaded from here