Assignment and Assumption Agreement and Optional Novation

by Practical Law Commercial Transactions

An agreement for use when one party (often referred to as the assignor or assigning party) transfers its entire contractual rights and obligations under one or more specified contracts to a third party (commonly referred to as the assignee or the assuming party). This Standard Document facilitates a complete transfer of the specified contracts by providing for the assignment of all rights and the delegation of all duties from the assigning party to the assuming party. This Standard Document also includes an optional novation provision, which, when included and consented to by the counterparty to the contract, releases the assigning party from all obligations under the assigned contracts and substitutes the assuming party as the new party to the contract. This resource also includes typical representations and warranties from both the assigning and assuming parties, as well as indemnification provisions to allocate risk for the transaction. This Standard Document has integrated notes with important explanations and drafting and negotiating tips.