The possibility of a no-deal Brexit is very much alive, as Tory leadership contenders jostle to take over from Theresa May as prime minister.

But what does the term “no deal” really mean?

What is a no-deal Brexit?

This means the UK would immediately leave the European Union (EU) with no agreement about the “divorce” process.

Overnight, the UK would leave the single market and customs union – arrangements designed to help trade between EU members by eliminating checks and tariffs (taxes on imports).

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The Brexit Party gained the most MEPs in May’s European elections, on a no-deal platform

No deal also means immediately leaving EU institutions such as the European Court of Justice and Europol, its law enforcement body.

And the UK would no longer contribute to the EU budget – currently about £9bn a year.

Under Theresa May’s deal – which was voted down three times by Parliament – the UK would have entered a 21-month transition period.

This would have provided some breathing space, maintaining much of the status quo, while the two sides tried to negotiate a trade deal.

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How could it happen?

After Theresa May’s deal was defeated, the Brexit deadline was extended to 31 October.

If nothing else happens, a no-deal Brexit will happen then.

To avoid a no-deal Brexit on this date, the UK government must pass a Brexit divorce plan into law, obtain another extension from the EU, or cancel Brexit.

Many politicians are against no deal.

They say it would damage the economy and lead to border posts between Northern Ireland and the Republic.

But some politicians support no deal and say disruption could be quickly overcome.

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What would it mean for trade?

Under a no-deal Brexit, there would be no time to bring in a UK-EU trade deal.

Trade would initially have to be on terms set by the World Trade Organization (WTO), an agency with 162 member countries.

If this happens, tariffs – taxes on imports – will apply to most goods UK businesses send to the EU.

Some companies worry that could make their goods less competitive.

The UK government has already said most tariffs will be abolished for EU goods coming to the UK, if there is no deal.

But the EU doesn’t have to do the same.

Trading on WTO terms would also mean border checks for goods, which could cause bottlenecks at ports, such as Dover.