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Why you should be reviewing your business contracts ahead of Brexit

Reviewing your contracts ahead of Brexit will allow you to identify and plan for any issues that may impact how you trade and do businesses with other EU countries from October 31.

According to the government, delivery times, customs clearance, duties payable etc all need to be considered. Here is a contracts checklist to help:

1. Analyse your existing contracts

You should be concentrating on your contracts with key suppliers and customers first, as these are more likely to have a potential financial and operational impact on your business.

After you’ve reviewed those contracts, move on to your supply chains and other third party contacts.

2. Review clauses

When the UK leaves the EU, existing contracts are unlikely to include commercial levers and mechanisms that reflect our new relationship with the EU.

Review contract clauses, including those relating to people, data, the import and export of goods/services and pricing. Any changes to currency after Brexit, for example, could see costs rise and have a negative impact on current contracts.

3. Review your Standard Terms of Business

These represent your future obligations so it’s vital you review these and feel comfortable you can meet them.

4. Think about your future relationships

Consider how Brexit will affect your customers/suppliers/partners. This will impact how you negotiate future relationships. It may be some existing relationships become uneconomical after Brexit.

Anticipate any potential challenges so you can plan internally. Make the necessary preparations now so you’re in a better position to negotiate.

5. Actively engage with your customers and suppliers

It’s important to have an open and honest conversation about how Brexit will impact your current business relationships. This will help both sides prepare and limit any potential fallout.

For the latest government advice on Brexit, visit the North East Growth Hub’s free Brexit Toolkit.

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