The purpose of this thesis is to find out what impact Brexit can have on those long-lasting contracts that were agreed upon before the vote by the British people to leave the European Union.
Brexit has brought along many political, legal and economic uncertainties for corporations operating internationally between a European Union member state and Great Britain. Furthermore, these uncertainties can have an impact on corporations trading with other corporations within a member state, by an unforeseen affect to their contract partners. The goal of this thesis is to examine these uncertainties impact on a specific long-lasting contractual relationship, with the hope of providing some illumination to a broader area of affected parties. This examination is done through an analysis of the macro- and micro-economic environment, in conjunction with an analysis of the legal framework, in which the parties operate. These include, but are not limited to, an analysis of Force Majeure and other legal remedies that can allow a breach of contract in Danish law under hardship. Furthermore, the preventative effect of a hardship-clause, including the economic and legal properties of such a clause, will be examined.
After examination the analysis shows that Brexit’s negative effects on the contract partners might not merit a breach of contract under Danish law. A hardship-clause may, after a legal and economic analysis, not be the most effective solution for the parties to prevent Brexit’s impact. Despite the added transaction costs a more tailored approach to Brexit’s possible outcomes might be necessary to maintain the contract’s efficient balance. A Brexit clause that has a more specific focus on the parties’ mutually beneficial relational rents can provide a better method to maintain these relational rents.
Finally, the thesis will use the economical and legal analysis to develop a recommendation of the strategic contracting elements in a proactive contract clause. This proactive contract clause can addresses the uncertainties of Brexit more effectively than more commonly used hardship-clauses from international trade.
|Educations||MSc in Commercial Law, (Graduate Programme) Final Thesis|
|Number of pages||75|