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This Deed of Novation is appropriate to use where one party (either a company or an individual) to an agreement is withdrawing from the agreement and its rights and obligations under that agreement are being taken over by another company or individual. If there is more than 1 entity as a continuing party and/or new party, then you should use our other deed of novation template.
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 amount to a substitution of new parties for old parties.
The new agreement must be made with the consent of the continuing party to the existing 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 party/parties that are to be released are released from further obligation under the agreement and the new party/parties who substitute that old party/parties take on all the old obligations and also have the benefit of all of the rights of the old party/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.