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Brexit: A brief look at effects on businesses

View profile for Josh Fresle
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The UK's separation from the EU plays host to a number of potential changes that businesses should carefully consider to ensure their contracts retain their desired effect.

Contracts

It is important to consider how your contract may be impacted by the terms included and consider amending these if necessary. Does the contract refer to the UK and EU separately? It is worth noting that if your contract makes a specific reference to the EU and has no specific reference to this also including the UK, the clause may not be deemed to apply to the UK at all. The EU and UK could be considered entirely separate territories. This could be especially important in relation to agency and distribution agreements which are usually specific to certain territories.

Clarity may also be required with regards to jurisdiction. Fortunately, English law is based predominantly on common law and therefore the UK's separation from the EU should have little to no effect on contract law itself. It may however become necessary for a clause in a contract to specify whether any contractual issues are decided by the English courts or another jurisdiction. In addition, businesses should ensure the correct governing law is utilised within their contracts.

Following Brexit there are now different requirements and restrictions on goods that travel across borders which should also be considered and changes to tariffs and customs declarations should be addressed.

GDPR

Although the law surrounding data protection in the UK is based on that of the EU, there are certain steps that could be taken to ensure compliance with GDPR rules. For businesses that collect the personal data of EU citizens, there may be a requirement to appoint an EU representative. The EU representative would act as a point of contact in a relevant country for its individuals to raise any concerns they have regarding how the company is processing their data.

It is thought that most transfers of personal data within the EU will be largely unaffected by Brexit however existing clauses should be reviewed to ensure compliance. Careful consideration should be given to transfers of data to non-EU countries. It is likely that non-EU countries will not in many cases have data protection rules that provide sufficient protection. The US for example, does not provide adequate data protection for the purposes of the EU GDPR rules. In cases where companies are transferring personal data to countries outside of the EU it may be necessary to consider negotiating to adopt the EU GDPR rules into contracts to ensure compliance.

There are many things that businesses could be doing to ensure they remain compliant with the new rules and regulations that come with the post Brexit world. It is vital to review relevant contracts and amend necessary provisions so that your business does not lose out.

This is not legal advice; it is intended to provide information of general interest about current legal issues.