Novation agreement (ab initio)

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Transfer all the rights and obligations under a contract to a new party, with this three-way agreement.

Author: Alasdair Taylor
Updated: 18 January 2023
Length: 4 pages
Notes: 3
Format: MS Word (.DOCX)

This novation contract template may be used to transfer the rights and obligations of one party under a contract to another person or organisation, where the transfer is to be effective from the date of the original contract. In other words, all the historic liabilities and rights of the transferor will pass to the transferee.

For an alternative approach, see also our standard novation agreement document.


  1. Definitions
  2. Novation
  3. Indemnity
  4. Third party rights
  5. Counterparts
  6. Law and jurisdiction


Can this document be executed only by the company transferring rights/obligations and the company to which those rights/obligations are transferred?

No. This is not an assignment of contractual rights. The other party to the contract must also sign the novation agreement.

After this novation contract has been agreed and signed, is the transferor entirely free from liabilities arising under the contract?

Not necessarily. Whilst the contract provides that the counterparty releases the transferor from all liabilities, the law may intervene in some cases to allow recovery. In addition, if the optional indemnity is included, then the transferor may be liable to compensate the transferee in respect of losses arising from breaches of contract by the transferor.

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