A simple novation agreement under which the rights and obligations of an outgoing party (the Transferor) under an existing contract are transferred to an incoming party (the Transferee), with the consent of the other original party (the Counterparty). Governed by the law of England & Wales.
How to use this template, read this first - Replace every
[SQUARE-BRACKET]field before use. - Novation vs assignment. You can usually assign (transfer) contractual rights without the other side's consent, but you cannot transfer obligations by assignment. To move both rights and obligations, you need a novation, which works by ending the old contract and replacing it with a new one on the same terms but with the new party in place of the old. Because it is a new contract, the consent of all three parties is essential. - Novation needs consideration (something of value exchanged) (usually the mutual release and the new promises) or the agreement should be executed as a deed to avoid any consideration argument. - Have a solicitor review before use.
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THIS NOVATION AGREEMENT is made on [DATE]
BETWEEN (1) [TRANSFEROR NAME] of [ADDRESS] (the "Transferor"); (2) [TRANSFEREE NAME] of [ADDRESS] (the "Transferee"); and (3) [COUNTERPARTY NAME] of [ADDRESS] (the "Counterparty").
Background
(A) The Transferor and the Counterparty entered into [DESCRIBE THE CONTRACT] dated [DATE] (the "Original Contract"). (B) The Transferor wishes to transfer its rights and obligations under the Original Contract to the Transferee, and the Counterparty consents, on the terms of this Agreement, with effect from [DATE] (the "Effective Date").
Agreed terms
1. Novation. With effect from the Effective Date, the Transferee assumes and will perform all of the Transferor's rights and obligations under the Original Contract in place of the Transferor, as if the Transferee had been a party to the Original Contract instead of the Transferor.
2. Counterparty's consent and release. The Counterparty: (a) consents to the novation; (b) agrees to be bound to the Transferee, and to perform its obligations to the Transferee, on the terms of the Original Contract; and (c) releases the Transferor from all future obligations under the Original Contract from the Effective Date.
3. Transferee's undertaking. The Transferee undertakes to the Counterparty to perform the Original Contract and to be bound by its terms from the Effective Date.
4. Accrued rights and liabilities. Except as stated, this novation does not affect rights or liabilities that accrued before the Effective Date. [Specify how pre-Effective Date sums / claims are dealt with.]
5. Original Contract continues. Save as novated by this Agreement, the Original Contract continues in full force on its existing terms.
6. Further assurance. Each party will do anything reasonably required to give effect to this Agreement.
7. Governing law and jurisdiction. This Agreement is governed by the law of England and Wales, whose courts have exclusive jurisdiction.
Execution
Signed by [TRANSFEROR]: __________________ Date: [DATE] Signed by [TRANSFEREE]: __________________ Date: [DATE] Signed by [COUNTERPARTY]: __________________ Date: [DATE] (If executed as a deed, use the appropriate deed execution and witnessing wording.)
--- This template is a starting point and not legal advice. Novation requires the consent of all parties and proper consideration or execution as a deed, have a qualified solicitor review and adapt it before use. Governing law: England & Wales.