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Risks To Consider Regarding Recruitment Contracts In the Eurozone

Risks To Consider Regarding Recruitment Contracts In the Eurozone

Kevin Barrow from Osborne Clarke reflects that some staffing companies operating across Europe have begun asking how contracts will be affected by a country leaving the Eurozone, and what they should do to prepare.

Key things to consider are:

&middot Changing contract terms to make clear that if there is a currency change in a Euro country into which supplies are being made then the debt due from the client defaults to $ or &pound value as at the date of supply. Otherwise due to the “lex monetae” rules the staffing company could end up being paid in a relatively worthless new local currency having already paid the workers in “proper money”.

&middot Staffing companies should consider including in agreements with clients in riskier countries a provision allowing them to terminate in these circumstances. Euro exit would not necessarily be an event of default or force majeure under most staffing company contracts.

&middot If staffing companies have subsidiaries in endangered countries (i.e. potential exiters from the Euro) and those subsidiaries hold cash, cash should obviously be stripped out regularly (daily)!

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