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Novation: Difference between revisions
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{{ | {{a|negotiation|}}In layperson’s terms a [[novation]] is the transfer in full of one party’s rights and obligations under a {{t|contract}} to another person. The '''transferor''' steps out of the contract and is no longer bound by it. The '''transferee''' steps in to the contract and assumes all the transferor’s obligations. The '''remaining party''' stays put, but must perform to, and may expect performance from, the transferee and not the transferor. | ||
===Bizarre love triangle=== | ===Bizarre love triangle=== | ||
Unlike an [[assignment]], a [[novation]] requires all three parties to agree. A party to an [[English law]] {{t|contract}} may “[[assign]]” its ''[[right]]s'' to a third person without its counterparty’s permission (as long as the contract does not forbid it); however, it cannot unilaterally assign its '''[[obligation|obligations]]'''. | Unlike an [[assignment]], a [[novation]] requires all three parties to agree. A party to an [[English law]] {{t|contract}} may “[[assign]]” its ''[[right]]s'' to a third person without its counterparty’s permission (as long as the contract does not forbid it); however, it cannot unilaterally assign its '''[[obligation|obligations]]'''. | ||