With all the mergers and acquisitions we should all understand Novation agreement?
Today’s post is from our archives at SafeSourcing.
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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