What is a Novation Agreement?

September 27th, 2016

Tyler is adding to the SafeSourcing Wiki and defining Novation agreement.

 

Today’s post is by Tyler Walther; Account Manager at SafeSourcing.

Tyler is adding to the SafeSourcing Wiki and defining Novation agreement.

A novation agreement is a legal document implemented by the original parties in a contract and a designated alternate to whom responsibilities of the contract have been transferred by one of the parties. This agreement transfers all rights and responsibilities under the contract to the successor. Novation requires approval from both parties of the original contract. Novation agreements are frequent in circumstances where companies that have entered into an agreement or contract are bought, sold, or in cases of merger.

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