Sale & Purchase Contracts
As in England and Wales and Northern Ireland, it is desirable as a matter of risk management and certainty to have written contracts with suppliers and other significant entities with which the business deals. In the case of contracts with third parties in the EU, international sale issues will need to be considered. The issues that arise under Irish law are almost identical to those arising in the UK context in dealing with third country entities.
There are strong EU wide rules that uphold the principle that the parties to a business to business contract may choose the applicable law, the courts or other dispute resolution mechanism which is to govern the contract. For an Irish based business, an Irish choice of law and choice of forum i.e. courts would be desirable.
The Irish law of contract is virtually identical to that in England and Wales and Northern Ireland. Most of the other basic legal principles are broadly similar or identical.
The courts’ procedure in Ireland is very similar to that in England and Wales. In contrast, the laws and legal systems in continental Europe are significantly different both in their content and court procedure. Therefore in addition to issues of language, the methods and mechanisms of the law in continental jurisdictions are much less intuitively familiar to a UK business, than would be the case in Ireland.
The parties to a contract may agree that the dispute resolution is to be by way of reference to arbitration. The principles and system of arbitration in the Republic of Ireland is very similar to that in the UK. An arbitration clause drafted by an appropriate body should be used so that it is coherent and works in the circumstances.
In some cases, it may be possible to choose the courts of England and Wales and the law of England and Wales to govern the relationship even though it involves a contract between a subsidiary in Ireland and the business in another EU state. The insertion of such a clause in their contract would be a matter of negotiation
At present, the EU wide rules can be used to stop inconsistent litigation in other EU courts. Although the EU and UK rules remain similar after Brexit, in the absence of a new agreement between the UK and EU, the ability to enforce the UK choice of law and choice of jurisdiction would be reduced relative to what is now in place, because the EU wide laws will no longer assist.
The same broad principles will apply to an English or Northern Ireland choice of law and choice of court in a business contract and will usually be upheld in EU courts. However, what is less predictable is whether the courts in another EU state would restrain contrary proceedings in the absence of the common EU legislation.