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GLOSSARY

Novation definition

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Published by a ��Ӱ�� Commercial expert

What does Novation mean?

Novation is the method by which the parties to an existing contract 'transfer' the rights and obligations of that contract to a third party. Novation is not strictly a transfer of rights and obligations but a discharge of the rights and obligations between contracting parties and a recreation of them with a third party (replacing an original contracting party) and one (or more) of the contracting parties to the original contract. A novation requires consideration and consent.

A novation can be distinguished from an assignment which transfers the benefits of a party to another party without extinguishing the original contract which remains in force (with or without any agreed amendments).

Commercial

Novation is the method by which the parties to an existing contract 'transfer' the rights and obligations of that contract to a third party. Novation is not strictly a transfer of rights and obligations but a discharge of the rights and obligations between contracting parties and a recreation of them with a third party (replacing an original contracting party) and one (or more) of the contracting parties to the

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View the related practice notes about Novation

Comparing UK and US secondary debt trading markets, with particular reference to the LMA v LSTA recommended terms for secondary trading

Comparing UK and US secondary debt trading markets, with particular reference to the LMA v LSTA recommended terms for secondary trading The UK and US secondary (private) debt trading markets are very similar when transacted on the suite of documents issued by the Loan Market Association (LMA) in the UK and by the Loan Syndications and Trading Association (LSTA) in the US. For more information on the documentation, terms and mechanics for LMA secondary debt trades, see Practice Notes: • Overview of the key documentation in a typical secondary debt trade • Secondary debt trading—timeline of a typical trade • Secondary debt trading—completing the trade confirmation, and • Key provisions in the LMA standard terms and conditions for secondary debt trading Historically, there has been a great deal of convergence between the two debt-trading regimes and conventions so that in most salient respects they are substantially similar. Nonetheless, the two-debt trading regimes and conventions contain some material differences as noted below. Governing law and legal...

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Step-in rights in a collateral warranty

Step-in rights in a collateral warranty It is standard practice in construction projects for the contractor, key sub-contractors and consultants (referred to in this Practice Note as warrantors) to provide collateral warranties to various parties, including funders and purchasers (referred to in this Practice Note as beneficiaries). See Practice Note: What are collateral warranties? The collateral warranty creates a direct contractual link between the beneficiary and the warrantor, without which the beneficiary would not have any right to claim from the warrantor in the event that it fails to properly perform its obligations under the building contract, sub-contract or appointment (as appropriate). A collateral warranty will contain an undertaking in respect of the obligations in the underlying contract, as well as dealing with matters such as copyright licences, assignment, professional indemnity insurance, and in some cases will included a step-in rights clause. This Practice Note explains what such step-in rights are, which parties will typically be granted step-in rights in a construction project, and looks at...

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Discover our 5 Practice Notes on Novation

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View the related precedents about Novation

Teaming agreement—short form

Teaming agreement—short form This Agreement is made on [date] Parties 1 [Insert name of party] [of OR a company incorporated in England and Wales under number [insert registered number] whose registered office is at] [insert address] (Party 1); and 2 [Insert name of party] [of OR a company incorporated in England and Wales under number [insert registered number] whose registered office is at] [insert address] (Party 2) Each of Party 1 and Party 2 being a party and together the parties. BACKGROUND (A) Party 1 provides [insert description of goods and/or services]. (B) Party 2 provides [insert description of goods and/or services]. (C) The parties wish to submit a Bid as a joint tender to the Customer in response to the Invitation to Tender. (D) The parties wish to set out their obligations and regulate their rights in relation to the Bid and, if their Bid is successful, they intend to enter the Customer Contract[ and the Joint Venture Agreement] in accordance with this Agreement. The...

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Process agent agreement

Process agent agreement This Agreement is made on [date] Parties 1 [insert name of Principal] [of OR a company incorporated in [insert jurisdiction] under number [insert registered number] whose registered office is at] [insert address] (Principal); and 2 [insert name of Process Agent] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Process Agent) (each of the Principal and the Process Agent being a party and together the Principal and the Process Agent are the parties). BACKGROUND The Principal wishes to appoint the Process Agent to provide the Services (as defined in clause 1) and the Process Agent has agreed to do so on the terms of this Agreement. The parties agree: 1 Definitions and interpretation 1.1 In this Agreement, unless otherwise provided: Business Day • means a day other than a Saturday, Sunday or public holiday[, on which clearing banks are open for non-automated commercial business in the [City of London]]; Commencement Date...

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Dive into our 34 Precedents related to Novation

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