A novation agreement is essentially a notice to the remaining party and, therefore, the requirements for service of termination must be met. Although it looks like a task, a novation is fundamentally different from a task. While a novation passes on the benefits and liability of the original contract to a new party, an assignment only passes the benefits on to the new owner and all obligations in the contract remain between the responsibilities of the original party. Novation criteria include acceptance of the new debtor by the debtor, assumption of responsibility by the new debtor, and acceptance of the new contract by the former debtor as full performance of the old contract. Novation is not a unilateral contractual mechanism, but leaves room for negotiation on the new GTC in the new circumstances. Thus, “the acceptance of the new contract as full performance of the old contract” can be read in conjunction with the phenomenon of “mutual consent of the GTC”. [4] Novation refers to the process of replacing the original contract with a substitute contract when the original party agrees to waive all rights granted to it by the original contract. In most novation agreements, the parties agree to delete the original contract and replace it with an entirely new contract. h) If the recognition of a legal successor in the interest of a public contract is compatible with the interest of the government, the responsible subcontractor implements a novation agreement with the contemptuous and assignee. Another classic example is when Company A enters into a contract with Company B and a novation is included to ensure that if Company B sells, merges or transfers the core of its business to another company, the new company assumes the obligations and responsibilities that Company B has with Company A under the contract.

Thus, with respect to the Contract, a buyer, party to the merger or acquirer of Company B is following in the footsteps of Company B with respect to its obligations to Company A. Alternatively, in the event of such a change under the Original Agreement,[5] a “Novation Agreement” may be signed. This is common in contracts with government agencies; An example under the U.S. Anti-Assignment Act is that the government entity that originally issued the contract must agree to such a transfer, otherwise it is automatically invalid by law. .