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Winston is a Partner in our Commercial team, based in London. He specialises in complex technology transactions and data protection advisory work, especially in the areas of financial services, fintech and the aviation industry.
“It’s important that businesses examine their areas of greatest risk if there was a no-deal Brexit and have detailed contingency to plans to deal them. Merely, hoping that the worst case scenario will not happen just isn’t an option. If nothing changes before the end of March, the UK will be leaving the EU without a deal”.
“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.”
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