Brexit: How digital solutions can help address the impact on contracts
Britain has now officially made its exit from the European Union (EU), and there are now over 600 new UK regulations. What impact does this have on your business and agreements? How can digital solutions help organisations to overcome the impact of Brexit on contracts? The EU is the biggest trading partner of the UK, and the effects are global. 41% of all exports from the UK are to the EU. Legal expert Andrew Hood, a partner in Regulation, Trade and Public Policy at Fieldfisher, joined Lynn Sumlin, Director of Agreement Cloud Strategy Practice at DocuSign, and Julian Kivett, a Senior Solutions Consultant at DocuSign, in a live webinar to discuss the key impact of Brexit on UK and European business transactions.
In this article, we take a look at their advice and how digital solutions can help organisations to execute revised agreements quickly and efficiently.
How does Brexit impact contracts and agreements?
Andrew Hood shared his advice on the impact Brexit has on legislation and trade, along with the clauses that are affected. Brexit has an impact on regulations, Trade in Goods, and Trade in Services. He discussed what companies need to do to adjust for new regulations that have a commercial impact on agreements.
Andrew suggests identifying the risks to your organisation and working to understand the impact the changes might have in order to mitigate those risks. He recommends reviewing your contractual and regulatory obligations and making adjustments for the new changes. Andrew gave an overview of the types of clauses that are affected and may need to be updated, which include:
- Territory definitions and locations - From the 31st of January 2020, any reference to the EU doesn’t include the UK.
- Currency and pricing - Identifying risks around exchange rates.
- GDPR - Before the UK left the EU, organisations could pass data freely between the EU and the UK without issue. Since Brexit, you can still move data freely for now, and the UK has said data can move freely to the EU. The EU has not yet confirmed that this is reciprocal on a permanent basis. You may need to put a data clause into contracts to make things run more smoothly if this changes.
- General Regulations - Pricing changes for contracts or commercial arrangements.
- Duties, tariffs, and taxes - There could be changes on tariffs and taxes depending on how and where your products are produced.
- Governing law, jurisdiction & dispute resolution - There could be some differences that have important implications.
- Force majeure - Organisations may need to update standard clauses to cover both the UK and the EU.
- MAC material adverse change, termination, and renewals - If a business anticipates that Brexit will seriously interfere with contracts, it can consider including a right to terminate or renegotiate terms in the event of particular Brexit-related occurrences.
Lynn suggests that it’s crucial that you should be able to identify impacted contracts and begin a risk assessment as a first step.
What are the challenges of adapting contracts for Brexit?
With so many contract clauses that need to be reviewed and updated, Brexit poses challenges for several organisations. The challenges include:
- Lack of visibility into existing contracts across a whole organisation.
- Managing resources and impact on legal and other teams. There’s a substantial manual effort required to review and negotiate all contracts.
- A large volume of terms and conditions to review and amend.
- Difficulty identifying which contracts have terms that need to be reviewed and locating contracts by clause or concepts.
It’s important to get full visibility of agreements and leverage resources to adjust and update them. Lynn says, “If you are embarking on a large scale remediation project, often new information comes to light as agreements are reviewed; with DocuSign Agreement Solutions, you can be nimble and easily query information you need to surface.”
How can digital tools help to overcome the impact of Brexit on contracts and agreements?
Any weaknesses in contract management can impact a company significantly. The DocuSign Agreement Cloud can help you identify risk areas and manage the updates to contracts and agreements in a streamlined and efficient way. Lynn suggests that leveraging an enterprise platform solution can drive significant efficiencies in time and resource as well as reducing costs based on a project based approach. Here are some of the ways the DocuSign Agreement Cloud can help.
- Identify risk areas with DocuSign Insight
DocuSign Insight is a leader in contract analytics, and the software helps you to search, filter and analyse agreements regardless of where they are stored. You can categorise your contracts for remediation purposes and identify clauses. It can give you 360° visibility of what is in existing agreements. Its AI-powered search includes keyword, natural language, and full Boolean search. Insight Accelerators provide in-depth analysis on a range of topics, and it includes a customisable “Brexit” view.
- Automate the revision of contracts with DocuSign CLM
DocuSign CLM can help you generate revised agreements and automatically populate contracts with data from external systems to streamline negotiations. It has been identified as a leader in contract lifecycle management in the Gartner 2020 CLM Magic Quadrant. You can also create templates and leverage clause libraries with pre-approved wording. DocuSign CLM integrates with Salesforce and contracts can be updated directly from Salesforce.
- Execute agreements and get them signed seamlessly with DocuSign eSignature
DocuSign eSignature allows you to easily route contracts and agreements to all approvers and signatories to speed up the approval of revised contracts. You can also utilise features like “Bulk Send’ to get many documents signed securely simultaneously.
- Collect provable consent to new terms and conditions with DocuSign Click
DocuSign Click can help organisations manage and collect provable consent to clickwrap agreements like terms and conditions, privacy policies, and disclosure agreements. It also provides visibility as to who has agreed with the changes and complies with top security and privacy standards.
If you want to discover more about the impact of Brexit on contracts and find out what you can do to update all of your agreements, download the webinar “Brexit: What’s the Deal For Your Agreements.”