Deed of novation: replacing a party to a contract

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What's a deed of novation: replacing a party to a contract, and when do you need it?

This agreement alters the terms of an agreement, to enable one of the original parties to it to be replaced by another party instead. The effect is that the contract itself will continue in effect, as if the replacement party had always been the other contracting party (either fully, or on a qualified basis).

Our drafting here accommodates the position where the incoming party takes on all the original liability under the original agreement (full liability), or just liability for anything happening after the novation takes place (qualified liability) – leaving the outgoing party still liable for anything that took place before.

By the same token, if the outgoing party is to remain liable for anything that happened before the novation event, the continuing party will also remains liable to the outgoing party for any breach by it prior to the novation.

The template here can be used in relation to any contract where one of the parties is being replaced.