Simple Novation Agreement Template

In this Agreement, the following terms have the meanings given below. Other capitalized terms have the meanings given to them elsewhere in this Agreement.

"Original Contract" means the contract described in the introduction to this Agreement, including any amendments, schedules, orders, or attachments made to it before the Transfer Date.

"Transfer Date" means the date and time on which the transfer under this Agreement takes effect, as set out in the section on the effective date and conditions, being [date and time] or, if later, the date on which all Conditions are satisfied or waived.

"Transferred Rights and Obligations" means all of the rights, benefits, duties, obligations, and liabilities of the Outgoing Party under or in connection with the Original Contract, whether they arise before, on, or after the Transfer Date, except as this Agreement says otherwise.

"Pre-Transfer Liabilities" means any liability, claim, debt, breach, or obligation under the Original Contract that arose from events, acts, omissions, or periods before the Transfer Date, whether or not it is known or has been claimed by the Transfer Date.

"Post-Transfer Obligations" means all obligations under the Original Contract that are to be performed, or that arise from events, acts, or omissions occurring, on or after the Transfer Date.

"Conditions" means the conditions to the Transfer Date listed in the section on the effective date and conditions.

"Business Day" means any day other than a Saturday, a Sunday, or a public holiday in [city/jurisdiction] on which banks are generally open for business.

"Losses" means all losses, damages, liabilities, costs, and expenses, including reasonable professional fees, that a party actually incurs.

With effect from the Transfer Date, the Outgoing Party transfers to the Incoming Party all of the Transferred Rights and Obligations, and the Incoming Party accepts that transfer.

From the Transfer Date, the Incoming Party takes the place of the Outgoing Party as a party to the Original Contract. Every reference to the Outgoing Party in the Original Contract will be read as a reference to the Incoming Party.

The Incoming Party agrees to be bound by the Original Contract and to perform all of the Post-Transfer Obligations as if it had been an original party to the Original Contract in place of the Outgoing Party.

From the Transfer Date, the Remaining Party will owe its obligations under the Original Contract to the Incoming Party and will be entitled to enforce its rights under the Original Contract against the Incoming Party.

The Original Contract continues in full force and effect, except for the change of party made by this Agreement. Nothing in this Agreement changes the commercial terms of the Original Contract unless this Agreement expressly says so.

The Outgoing Party will, on or before the Transfer Date, hand over to the Incoming Party all records, documents, data, and materials in its possession or control that are reasonably needed to perform the Original Contract, including those listed as [description of items to be handed over].

Any deposit, prepayment, credit, guarantee, or security held under the Original Contract will, from the Transfer Date, be treated as held for the Incoming Party, as follows: [describe treatment of deposits, credits, or security].

The Remaining Party consents to the transfer of the Transferred Rights and Obligations from the Outgoing Party to the Incoming Party, and agrees to accept the Incoming Party as its counterparty under the Original Contract from the Transfer Date.

This consent is given for the purposes of any provision of the Original Contract that restricts or requires approval for assignment, transfer, or change of control, and the Remaining Party waives any such restriction or notice requirement to the extent needed to give effect to this Agreement.

The Remaining Party confirms that, as of the Agreement Date, it has not given or received any notice of termination, default, or dispute under the Original Contract, except as follows: [describe any exceptions, or state "none"].

The Remaining Party agrees that it will not claim against the Incoming Party any set-off, counterclaim, or defense that arises from a claim against the Outgoing Party that is unrelated to the Original Contract.

The Remaining Party confirms that it has had the opportunity to review the identity, financial standing, and capability of the Incoming Party and is satisfied with them for the purposes of this Agreement.

This consent is given only for the transfer described in this Agreement. It does not apply to any later transfer of the Original Contract unless the Original Contract allows it or the Remaining Party agrees in writing.

With effect from the Transfer Date, the Remaining Party releases and discharges the Outgoing Party from all Post-Transfer Obligations and from all claims and liabilities under the Original Contract that arise from events, acts, or omissions occurring on or after the Transfer Date.

The Remaining Party agrees that it will not bring any claim against the Outgoing Party in respect of the Post-Transfer Obligations and will look only to the Incoming Party for their performance.

Unless the parties agree otherwise in writing, the release in this section does not release the Outgoing Party from the Pre-Transfer Liabilities. Those liabilities are dealt with in the next section.

[Optional: The Remaining Party also releases the Outgoing Party from the following Pre-Transfer Liabilities: [describe any pre-transfer liabilities that are released, or state "none"].]

With effect from the Transfer Date, the Outgoing Party releases the Remaining Party from all obligations the Remaining Party owed to the Outgoing Party under the Original Contract in respect of the period on or after the Transfer Date.

Any guarantee, security, or credit support given by the Outgoing Party for the Original Contract will [remain in place until replaced by the Incoming Party / be released on the Transfer Date], as follows: [describe arrangement].

The release in this section does not apply to any claim based on fraud, willful misconduct, or any liability that cannot lawfully be released.

The Outgoing Party remains responsible for the Pre-Transfer Liabilities. The Remaining Party may enforce them against the Outgoing Party, and the Incoming Party has no responsibility for them, except as stated in this Agreement.

The Incoming Party is responsible for all Post-Transfer Obligations and will perform them in accordance with the Original Contract.

Amounts payable under the Original Contract will be divided between the Outgoing Party and the Incoming Party according to the period to which they relate. Amounts relating to periods before the Transfer Date belong to or are payable by the Outgoing Party, and amounts relating to periods from the Transfer Date belong to or are payable by the Incoming Party.

If a party receives money that belongs to another party under the previous clause, it will hold that money for the other party and pay it over within [number] Business Days of receipt, without set-off.

The Outgoing Party will indemnify the Incoming Party against Losses arising from the Pre-Transfer Liabilities, except to the extent the Losses are caused by the Incoming Party or the Remaining Party.

The Incoming Party will indemnify the Outgoing Party against Losses arising from the Post-Transfer Obligations, except to the extent the Losses are caused by the Outgoing Party.

A party seeking an indemnity under this section must tell the indemnifying party about the claim in writing within a reasonable time, give it reasonable details, and allow it to take part in the defense or settlement of the claim. Delay by a party relieves the indemnifying party only to the extent it is actually prejudiced by that delay.

If it is unclear whether a liability is a Pre-Transfer Liability or a Post-Transfer Obligation, the parties will first try to agree in good faith. If they cannot agree within [number] days, the matter will be resolved under the section on governing law and dispute resolution.

This Agreement takes effect on the Agreement Date, but the transfer of the Transferred Rights and Obligations takes effect on the Transfer Date.

The Transfer Date will be [date and time], provided that all of the Conditions have been satisfied or waived by that date.

The Conditions are: (1) the Outgoing Party, the Incoming Party, and the Remaining Party have each signed this Agreement; (2) the Incoming Party has delivered to the Remaining Party [documents, insurance, guarantees, or security required]; (3) any approval or consent needed from a third party or authority has been obtained; and (4) [any other condition].

Each party will use reasonable efforts to satisfy the Conditions within its control as soon as reasonably possible.

The Conditions in item (2) are for the benefit of the Remaining Party and may be waived only by it in writing. The other Conditions may be waived only by agreement of all parties in writing.

If the Conditions are not satisfied or waived by [long-stop date], any party that is not in breach may end this Agreement by written notice to the others. In that case the Original Contract will continue unchanged between the Outgoing Party and the Remaining Party, and no party will have any claim against another under this Agreement, except for claims already arising from a breach of this Agreement.

The parties will confirm in writing the date on which the Conditions are satisfied or waived, and that date will be treated as the Transfer Date if it is later than the date stated above.

Each party promises to each of the other parties that, as of the Agreement Date and the Transfer Date, it is duly organized and validly existing, and has full power and authority to sign this Agreement and carry out its terms.

Each party promises that signing and performing this Agreement does not break any law, its governing documents, any court order, or any agreement that binds it.

The Outgoing Party promises that: (1) it is the sole holder of the Transferred Rights and Obligations; (2) it has not transferred, pledged, or otherwise dealt with them in any way; (3) the Original Contract is in full force and effect and the copy given to the Incoming Party is true and complete; and (4) except as disclosed in writing to the Incoming Party, it is not aware of any default, dispute, or claim under the Original Contract.

The Incoming Party promises that it has the resources, skills, licenses, and approvals needed to perform the Original Contract, and that it has reviewed the Original Contract and accepts its terms.

The Remaining Party promises that the Original Contract is in full force and effect, that it has not assigned or pledged its rights under it, and that, except as disclosed in writing, it is not aware of any default by the Outgoing Party.

Each party promises that all information it has given to the others about the Original Contract for the purposes of this Agreement is, to the best of its knowledge, accurate and not misleading in any important respect.

A party that breaches a promise in this section will be liable to the others for resulting Losses, subject to the rules on notice of claims in the section on responsibility for obligations.

Each party will, at the reasonable request of another, sign documents and take other steps that are reasonably needed to give full effect to this Agreement.

The Outgoing Party will give the Incoming Party reasonable help during a transition period of [number] days after the Transfer Date, including answering questions and providing information about the Original Contract and its performance.

The Remaining Party will update its records, accounts, and systems to show the Incoming Party as its counterparty from the Transfer Date, and will give the Incoming Party any information, access, or credentials reasonably needed for performance.

Each party will promptly tell the others if it learns of any event that may affect the Conditions, the Transfer Date, or the performance of the Original Contract.

Any notice under this Agreement must be in writing and delivered by hand, by courier, or by email to the address below, or to any other address a party gives by notice:

Outgoing Party: [name, address, email, attention of]

Incoming Party: [name, address, email, attention of]

Remaining Party: [name, address, email, attention of]

A notice is treated as received: if delivered by hand or courier, on delivery; if sent by email, at the time of sending, unless the sender receives an error message, and if that time is not on a Business Day or is after [time] on a Business Day, on the next Business Day.

Notices under the Original Contract that are sent after the Transfer Date to the Outgoing Party will be passed on to the Incoming Party by the Outgoing Party within [number] Business Days of receipt.

Unless this Agreement says otherwise, each party will bear its own costs and expenses of preparing, negotiating, and signing this Agreement.

The Outgoing Party will pay the costs of the Remaining Party that are reasonably and properly incurred in reviewing and approving this Agreement, up to a maximum of [amount].

Any fee, charge, or cost that the Original Contract or a third party requires to be paid for the transfer, including any transfer or processing fee, will be paid by [party].

Any taxes, duties, or similar charges that arise because of this Agreement will be paid by [party], and the parties will cooperate to reduce them where lawfully possible.

Costs of performing the Original Contract that relate to the period before the Transfer Date will be borne by the Outgoing Party, and costs relating to the period from the Transfer Date will be borne by the Incoming Party.

If a party pays a cost that another party has agreed to bear, the paying party may invoice the other, who will pay within [number] days of receiving the invoice.

This Agreement, and any dispute or claim arising out of or in connection with it, is governed by the laws of [governing jurisdiction].

The parties will first try to settle any dispute through good-faith discussions between senior representatives. A party raising a dispute must give written notice describing it, and the discussions will start within [number] days after that notice.

If the dispute is not settled within [number] days after the notice, any party may refer it to [court or arbitration institution, rules, seat, number of arbitrators, language] for final resolution.

The courts or tribunal named above will have [exclusive / non-exclusive] jurisdiction over the dispute.

Disputes about the Original Contract between the Incoming Party and the Remaining Party after the Transfer Date will be resolved under the dispute resolution terms of the Original Contract.

A party may ask a court of competent jurisdiction for urgent interim relief, such as an injunction, at any time to protect its rights.

Each party will keep performing its obligations under this Agreement and the Original Contract while a dispute is being resolved, unless performance is impossible because of the dispute.

This Agreement is the entire agreement between the parties about its subject matter and replaces all earlier discussions and understandings about the transfer. It does not replace the Original Contract, which continues as changed by this Agreement.

If this Agreement conflicts with the Original Contract about the transfer, the party change, or the allocation of liabilities, this Agreement prevails.

This Agreement may be changed only in writing signed by all parties.

No party may assign or transfer its rights or obligations under this Agreement without the written consent of the other parties.

If any part of this Agreement is found to be invalid or unenforceable, the rest of it stays in force, and the parties will replace the invalid part with a valid one that is as close as possible to the original intent.

A failure or delay by a party in exercising a right is not a waiver of that right. A waiver is effective only if it is in writing and signed by the waiving party.

This Agreement benefits and binds the parties and their permitted successors. Except as stated here, no one who is not a party has any right to enforce it.

This Agreement may be signed in counterparts, including by electronic signature or scanned copy, each of which is an original and all of which together form one agreement.

Each party will keep the terms of this Agreement confidential and will not disclose them except to its advisers, as required by law, or as needed to enforce this Agreement.