Novation Agreement (Short Form)

by Practical Law Commercial Transactions

A short-form novation agreement for use where one party to a contract transfers all of its rights and obligations under the contract to, and is replaced by, a third party. This agreement is structured for a three-party transaction involving an assigning party (the transferor), an assuming party (the transferee), and the counterparty to the original contract. A key feature of this Standard Document is the complete discharge of the assigning party, which is relieved of all further obligations and liability under the original contract. The assuming party is substituted for the assigning party, undertaking full performance of the assigned contract and acquiring all of the assigning party's original rights and obligations. This Standard Document has integrated notes with important explanations and drafting tips.