One of the unintended (and increasingly urgent) consequences of any Brexit is the possible impact on existing commercial and construction contracts. 

Some sectors (notably insurance) have engaged early on with the question of ongoing policy validity in the UK and EU after Brexit. But the impact on existing contracts is not yet clear in many other sectors and so a huge number of business-critical contracts are yet to be reviewed for Brexit resilience.

Although English contract law will be largely unaffected by even a “hard Brexit”, there are a number of ways that Brexit-related events could affect contractual relationships. 

For example, subcontractor costs could rise where staff, tariff or customs requirements are increased, or where exchange rates fluctuate significantly, which could render existing payment mechanisms obsolete. Delays to contracts caused by, for example, delayed delivery of materials due to longer customs procedures, or lack of a relevant “type approval”, could frustrate the parties’ ability to comply with their contractual obligations. This gives rise to potential termination of contracts where the contractor is unable to deliver because of events outside its control. It also increases the possibility of contract disputes on delays and/or cost overruns. 

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