Frustration of Purpose as a Tool to Avoid Contracts in New York: The BREXIT Fallout

We have clients that are supplying products to UK companies and UK companies that are being supplied products by U.S. companies. With the surprising outcome of the Brexit vote, the purpose of these agreements are now frustrated because, often, these products are used in finished products assembled in EU nations. This situation often arises in complex products. For example, a U.S. business has a piece of technology that is integrated into a British component. The British component is then further integrated into a finished product manufactured in Germany. The situation is not as rare as you think. We suggest an immediate review of your contracts. With the potential for UK companies to have decreases in sales, a fixed supply contact may be invalidated based on the Frustration of Purpose principle. Obviously, the opposite may also be true. A UK company may be unable to provide products (Impossibility Principle) or provide

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