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Brexit and Commercial Contracts

Brexit and Commercial Contracts

Tuesday, December 15, 2020

Many businesses, particularly those dealing with EU entities, will have audited their commercial contracts throughout the Brexit transition period. However, as we approach the end of the transition period, fresh audits of existing contracts should now be considered.

The difficulty many businesses are facing is, given that so much is undecided and last-minute discussions are continuing, it is not yet clear how their contracts will be affected.

Businesses will naturally focus on the financial provisions in the contracts. As such, businesses should keep a close eye on the impact of developments of ongoing negotiations, specifically in relation to:

  • Currency fluctuation;
  • Charges and levies; and
  • Trade barriers

Disputes are also likely to rise as potential costs and restrictions of movement of goods are put in place, making complying with contractual obligations increasingly difficult.

Whilst the UK and EU courts will uphold English governing law clauses, the position in relation to which court will have jurisdiction over disputes, and enforcement of judgments is less certain. It is therefore important to check commercial contracts are explicit as to whom has jurisdiction. Businesses currently negotiating contracts may also wish to consider arbitration clauses in their contracts, as an alternative way to resolve any disputes.

If you require advice on the points raised in this article, please contact Thomas Cumming at Samuel Phillips Law on 0191 255 0210 or

Correct as at 15th December 2020, but the status of the Brexit negotiations are ever-changing so please contact us for more up to date information.

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