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The Commercial Agents Regulations 1993 (‘CAR93’) regulate the relationship between a commercial agent in the UK, and their principal. The CAR93 derives from an EU directive, namely, the EU Commercial Agents Directive. CAR93 defines a commercial agent at Article 2(1) as: “…a self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of another person (the “principal”), or to negotiate and conclude the sale or purchase of goods on behalf of and in the name of that principal…”.

For commercial agents in the UK whose agreements are governed by English law, there will not be any significant change in the short term. However, if the UK Parliament decides to modify or repeal the CAR93 in the future, then this could affect how agents whose agreements are governed by English law will be treated.

For further information see Commercial Agency Agreements or contact Christopher Buck, Associate Partner and Solicitor, on 01908 660966 / 01604 828282 or by email at Christopher.Buck@franklins-sols.co.uk.

How might your commercial contracts be affected by the end of the Brexit transition period, and what can you do to protect your position?

On 30 December 2020, the UK government and the European Commission signed the EU–UK Trade and Cooperation Agreement (TCA) which now governs the trade relationship between the UK and the EU following the end of the transition period on 1 January 2021. The following checklist sets out some of the key provisions of a commercial contract that will need to be considered.

Contractual Provision

Considerations

Definitions
The UK is no longer an EU country and so references to the EU or the European Economic Area (EEA) will not include the UK. To define a territory, references to the EU or EEA will need to expressly state that this includes or excludes the UK. Another option would be to list each individual jurisdiction separately.

 

References to EU Law
The TCA is an international treaty. Retained EU law is EU legislation up to 31 December 2020 and which will continue to apply in the UK. References to EU law should to be amended to ‘Retained EU law’ or EU law which forms part of UK domestic legislation.

 

Tariffs and Quotas
There will be no import tariffs or other customs duties or quotas on imports of UK-origin goods into the EU or EU-origin goods into the UK. The TCA contains rules of origin which outline the criteria to determine a product’s origin. Potential issues may arise in relation to products made in the UK or the EU, but which use materials from outside the UK or the EU.

 

GDPR and Data Protection
EU GDPR has been incorporated into UK data protection law. Data transfers from the UK to the EEA are not restricted. The EU has agreed to delay transfer restrictions from the EEA to the UK for at least another 4-6 months. Therefore, businesses can continue to transfer personal data from the EEA to the UK during this period.

 

Termination / Suspension Events
The end of the transition period may create financial hardship and uncertainty for a business, making performance of a contract difficult or impossible. The possible Brexit impacts include: increased risk of insolvency for some businesses; a contract is no longer needed due to Brexit; and unpredictable market conditions. It is unlikely that these situations will be covered by a general force majeure clause. Consider including express clauses into a contract to include:

·         termination on shorter notice;

·         a right to terminate for convenience; or

·         link termination rights to performance factors, for example service levels/KPIs.

 

Change Control
Change control or variation procedures refer to clauses which govern how and in what circumstances a contract may be varied or amended. The possible consequences of Brexit are that current contractual obligations become unenforceable or that there are increased costs to ensure compliance with contractual obligations due to changes in the law. Incorporate clauses into contracts to allow changes to be made to the contract to ensure compliance with changes to the law and include provisions to regulate how the cost of any changes will be met, for example pricing adjustments.

 

Consents and Permissions
New consents, permissions or licences may be needed to supply goods or provide services under a contract. For example, there will be a need for export and import declarations and other administration for cross-border trade. It will need to be made clear in the contract which party is responsible for obtaining and filing any additional documentation. There may also be a requirement for product conformity assessments to ascertain whether a product can be sold in both the EU and UK.

 

TUPE
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE 2006) implements EU law. However, the impact of Brexit on TUPE is likely to be limited given that TUPE is a widely used mechanism in the UK.

 

Governing Law and Jurisdiction
UK contract law is largely unaffected by Brexit. Nevertheless, it is still important to incorporate a clause that states the contract is governed by the exclusive jurisdiction of the courts of England and Wales.

 

Click here for a downloadable PDF version.

For legal advice and assistance, contact Christopher Buck, Associate Partner & Corporate Solicitor, at Franklins on 01908 660966 or email christopher.buck@franklins-sols.co.uk.

The UK officially left the European Union on the 31st of January 2020 and the transition period is now over. Now that a deal has been made with the EU, how does this affect divorce proceedings?

Many people do not know that divorce in England and Wales is founded on the jurisdictional requirements of EU law, called Brussels IIA. Brussels IIA rules determines which Court is responsible for dealing with matrimonial matters in disputes involving more than one country. There are, therefore, two main areas which will be impacted in divorce proceedings. Firstly, the jurisdiction for divorce, i.e. which country you can get divorced in and secondly how divorce in the UK will be recognised abroad.

Jurisdiction

Before the 1st of January 2021, the jurisdiction rules set out in Article 3 of Brussels IIA applied to all cases of opposite sex divorce, legal separation, and annulment in England and Wales. This means you were allowed to bring divorce proceedings in a particular EU country if you could prove one of the following:

  1. You and your spouse live in that country;
  2. You and your spouse were last living there and one of you still resides here;
  3. Your spouse is living there;
  4. If you were to make a joint application, either of you are living there;
  5. You have been living there for at least a year immediately before your application is made;
  6. You have been living there for at least 6 months immediately before the application was made and are domiciled there; or
  7. You and your spouse are both domiciled there.

However, as of the 1st of January 2021, the Jurisdiction and Judgments (Family) (Amendment etc.) (EU Exit) Regulations 2019 has now come into force to replace Brussels IIA. This means the Courts in England and Wales now have the discretion to stop or pause proceedings when there are divorce proceedings continuing in another jurisdiction.

Another thing that has changed from 1st January 2021 is that where parties are in competition to secure jurisdiction in two different EU countries, the EU rule which states that the first party to issue proceedings in a country will secure jurisdiction, will no longer apply from the UK’s perspective. Instead, the country with the ‘closest connection’ to the divorce will have jurisdiction. Please note that how the courts of each EU member states will respond from 1 January 2021 where a divorce is lodged first (or otherwise) in England will depend on their national law. 

Furthermore, sole domicile as a ground of divorce jurisdiction has also been added.

Recognition

Prior to the 1st of January 2021, UK divorce orders were automatically recognised in the EU (except Denmark), and the UK also recognised divorce orders made in the EU, in the same way under Brussels IIA.

However, as of the 1st of January 2021, the rules under Brussels IIA are now governed by the 1970 Hague Divorce Recognition Convention. This means that UK divorces will only be recognised by countries which have signed up to the Convention and the UK will recognise divorces ordered by countries which have signed up to the Convention. The 12 EU member states that are currently signed up to the 1970 Hague Convention on Divorce Recognition are Cyprus, Czech Republic, Denmark, Estonia, Finland, Italy, Luxembourg, Netherlands, Poland, Portugal, Slovakia, Sweden.

Finally, please note that if the divorce was granted before the transition period or if the divorce proceedings started before the end of the transition period, the Courts in England and Wales will continue to recognise divorces granted in EU member states in the same way under Brussels IIA.

Here at Franklins, our experienced solicitors will be able to advice you if you need assistance in deciding where to bring your divorce proceedings. Please contact our Family Team on 01604 828282 / 01908 660966 or email Family@franklins-sols.co.uk.

Whilst many would agree that the Brexit process has been a protracted and frustrating one, it would appear that in the context of a lease entered into prior to the referendum, Brexit cannot be considered a frustrating event.

In the recent case of Canary Wharf (BP4) T1 Ltd v European Medicines Agency [2019] EWHC 335 (Ch), the European Medicines Agency (“EMA”) served notice on the Defendant that as and when the UK leaves the European Union, it would treat its 25 year lease, entered into in 2014, of its London headquarters as frustrated.

The doctrine of frustration is well described by Lord Radcliffe in Davis Contractors Ltd v Fareham UDC to state “Frustration occurs wherever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract”. The question before the court was whether Brexit had this effect on the EMA’s lease.

The High Court took a dim view of the challenge of the EMA. The EMA retained its power as conferred upon it by the EU to acquire and dispose of property whether within or outside of the EU, and the EMA had the right under the terms of its lease to assign or sub-let the premises. Furthermore, it was a decision taken by the EU itself to relocate the premises of the EMA from London to Amsterdam, which was considered by the court to amount to ‘self-induced frustration’. There was nothing to prevent an EU institution from maintaining headquarters in a country outside of its member states.

The case serves as a demonstration that Brexit will not be classed as a supervening event of sufficient gravity to frustrate a contract, unless it is specifically provided for within the said contract. The fact that a party is left with a bad bargain or that performance of their obligations has become more difficult is not sufficient to frustrate the contract. The importance of having a well drafted break clause within a lease is also highlighted by the case.

Leave was granted by Marcus Smith J to appeal and the result is eagerly awaited.

If you have questions in relation to leases and how they may be affected after Brexit, please contact our Commercial Property team on 01604 828282 / 01908 660966.