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The effect of a Deed of Novation is to discharge a previous contract or agreement and enter into a new agreement on the same terms but with one or more of the parties being different. It involves the release of one or more parties from the earlier agreement and their substitution by new parties to take on the obligations of the released parties and also their rights. The Deed of Novation effects substitution of new parties for old parties. If there is only 1 entity as a continuing party and/or new party, then you should use our other Deed of Novation Template.
The Deed Novation Agreement must be made with the consent of all parties to the Old agreement or contract.
A Deed of Novation is different from an assignment because in an assignment, the parties to the contract do not change. The effect of an assignment is purely to assign rights, not obligations. The effect of a Deed of Novation is that the old parties that are to be released are released from further obligation under the agreement. The new parties agree to substitute those old parties, to take on all the old obligations and to have the benefit of all of the contractual rights of the old parties.
This Deed of Novation requires a copy of the Old Agreement (ie. The agreement that is being novated) to form an attachment to this Deed.