Setting aside the various political, social, and economic issues that will continue to arise out of the United Kingdom’s Brexit vote earlier this summer, several sources reported on a curious piece of tangential news with which I at least took comfort. Several news sources reported that many contracts executed in the months leading up to the referendum, especially corporate and real estate deals involving UK parties, allowed the parties to terminate the agreement if the UK voted to exit the European Union. While the circumstance may have been unique, the concept was not.
Many deals entered into in Arizona have contingencies of one form or another. Contingencies with which many readers are familiar include a Buyer’s satisfactory review of the Seller’s financial records in a loan or a stock purchase agreement, satisfactory review of title and environmental issues that arise in real estate purchases, and employment offers contingent on passing a drug screening. But that does not mean that all contingencies must be within the control of the parties; as Brexit reminds us to the contrary, parties are free to contract on many issues that are wholly extraneous to the deal itself.
If you believe you have identified a potential impact an issue may have on your willingness to go forward with a deal or a potential impact on the long-term value of an asset you are purchasing, we encourage you to speak to an attorney about whether that issue could be suitable as a contract contingency.
