UK-based LegalWeek urges its readers to treat the possibility of an exit from the euro as part of their disaster contingency planning. While the overwhelming majority of Michigan lawyers are probably safe in regarding the euero crisis as mostly a spectator event, some of the points in LegalWeek's briefing are worth considering, even sitting as we are an ocean away. Some pertinent questions, to which they offer tips:
- Have you entered into loan agreements in euro?
- Do you know the applicable law, jurisdiction and place of payment of contracts concluded with international partners?
- o you know what rights exist to terminate or renegotiate long-term contracts in the event of a euro exit?
Among the tips: You should not only consider contracts with partners in the Eurozone, but also contracts in US-dollar, Swiss franc or yen; exchange rate fluctuations could have adverse economic effects on the contracts. In the worst case scenario your contracting partner might disappear completely. What security do you hold? What would collateral be worth in the event of a euro exit?