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Ensure Your Commercial Contracts are Compliant with Brexit & CPRA

September 29, 2022

Legal Talent Outsourcing

How to Ensure Your Commercial Contracts are Compliant with Brexit, CPRA and Other Legal and Regulatory Changes Impacting Your Business

When COVID-19 hit, companies and their legal departments were left scrambling to figure out the implications of a pandemic and the resulting shutdown orders on their commercial contracts. The term “force majeure” had its moment.

What that episode demonstrated is how macro external events can have a big impact on discrete contractual relationships. And it’s not just global pandemics and other “Acts of God” that can (and do) have this effect.

Much more routine but no less significant events, such as voting referendums and government legislation, can trigger the need to closely review, and in some cases revise, commercial contracts.

Such events happen regularly enough that monitoring their occurrence and implications should be a standard practice of a company’s commercial contract management.
 

The Impact of Brexit and CPRA on Your Commercial Contracts

So what are some of the external events happening right now that could have an impact on your contracts? Two of the most significant and high profile circumstances are the implementation of Brexit and the California Privacy Rights Act (“CPRA”).

Last year, Brexit became official, which ushered in a host of legal and regulatory changes. For in-house legal departments, this meant coming to grips with the implications of the United Kingdom’s (“UK”) exit from the European Union (“EU”) on commercial contracts which took effect pre-Brexit.

For companies with thousands of commercial contracts, this has been a massive undertaking (one that, for many, is ongoing—or in some cases hasn’t even begun).

In practical terms, what’s involved is reviewing contracts for key terms and provisions including:
  • Mentions of the UK or EU, because, for example, in certain instances pre-Brexit contracts may reference the EU when it now needs to separately designate the UK.
  • References to particular currencies, such as Euros instead of sterling.
  • Governing law and jurisdiction provisions.
  • Data protection.
  • Material adverse change, force majeure and frustration of purpose provisions.
The same sort of process is required with respect to the impending January 1, 2023 effective date of the CPRA, as well as other instances of legal and regulatory change. In the case of the CPRA, businesses need to be aware of the broad range of data and privacy compliance requirements it imposes, and ensure that their commercial contracts are updated accordingly.

For companies who are impacted by CPRA, some examples include:
  • Affirmative obligations to include specific provisions within agreements with service providers and contractors that have access to human resources data.
  • The need to enter into agreements containing specific provisions with third parties to the extent a business sells or shares a consumer’s personal information with third parties.
  • Updates required to privacy notices, including mandatory disclosures about the new consumer rights and data retention practices. 

Stay on Top of Your Commercial Contracts

As the old saying goes, the only constant in life (and business) is change. And, as we’re experiencing with Brexit and the CPRA, hardly anything changes more than legal and regulatory obligations that impact your business. To remain compliant, mitigate risks, and grow your business, your commercial contracts must be continually reviewed and updated.

That’s a big challenge for any in-house team, considering the huge volume of contracts most businesses deal with. And that’s why it’s important to partner with a commercial contracts outsourcing expert like Lexitas to ensure that contract review and updates are done in an efficient and effective manner. An audit of existing contracts, as well as ensuring that contract templates that will form the basis of new contracts, is critical for dealing with legislative changes and mitigating risk. 

Lexitas excels at working with in-house teams to establish processes, playbooks, and to select and implement technology that enables businesses to future-proof contracts against the risks of legal and regulatory change.

Contact us to learn more about ways we help businesses manage and optimize their commercial contracts.
 
Author Image

Meron Hewis

President, Legal Talent Division

Meron Hewis is the President of the Legal Talent Outsourcing Division of Lexitas. Ms. Hewis has over 20 years of experience in legal consulting, project management, and alternative legal talent outsourcing solutions. She is a thought leader in the industry, providing unique legal solutions and designing the operations of various legal programs internationally.

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