"Novation Agreement Template"

What Is a Novation Agreement?

When an agreement between two parties is transferred by one of the parties to a new person or group, a Novation Agreement must be written to confirm that both parties agree to the original stipulations. It will also transfer all the benefits and burdens of the original contract to the new party.

For example, a Novation Agreement can be used if a bank is bought out by a competitor and will need to update mortgage agreements that will now have the new bank as the lender. This will allow the bank to take ownership of the original agreement. A Novation Agreement template can be downloaded through the link below.

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How to Write a Novation Agreement?

The Novation Agreement format implies the following information:

  1. An opening statement with the date and names of each party who are agreeing to enter into the agreement.
  2. Each statement renewing the terms and conditions should begin with the word, "whereas," to signify that the previous parties had agreed to the statement and the new parties will agree to maintain the original agreement. Be aware if you decide to amend the agreement this can trigger a legal response from the opposing party since the original agreement would be changed.
  3. The date of the original agreement and the names of both parties, and signifying which party has since transferred their duties within the agreement.
  4. How long the agreement was set for and if there was an option for renewal.
  5. A statement that the new party will be undertaking all rights and responsibilities of the agreement and the original party that is leaving the agreement will retain no duty or liability from the agreement.
  6. The new party agrees to maintain all aspects of the original agreement and acknowledges the decision to continue the agreement serves as a benefit to both parties of the agreement.
  7. Include any state law that refers to a corporation's ability to enter into a Novation Agreement and that both parties agree that the laws pertain to the agreement being signed.
  8. For the final statement, you will want to begin with "Now, therefore," to signify the change in ownership from the original party to the new party in the agreement and any future renewals.
  9. Include a final signature section with dates, titles, federal identification numbers, and space for notarization if necessary.

Check out these related forms and templates:

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Download "Novation Agreement Template"

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Novation Agreement
This Novation Agreement (hereinafter referred to as the “Agreement”) is entered into as
of ___________________, by and between:
___________________________, with a mailing address of _________________
______________________________ (hereinafter referred to as the “Transferor”);
___________________________, with a mailing address of _________________
______________________________ (hereinafter referred to as the “Transferee”);
___________________________, with a mailing address of _________________
______________________________ (hereinafter referred to as the “Third Party”).
The Transferor, Transferee, and Third Party are collectively referred to as the “Parties,”
all of whom agree to be bound by this Agreement.
THE PARTIES AGREE TO THE FOLLOWING FACTS:
The Third Party has entered into certain purchase orders and/or subcontracts with the
Transferor, namely: _______________________________________________________
_______________________________________________________________________
_______________________________________________________________________
The terms “purchase orders” and “subcontracts”, as used in this Agreement, means the
named purchase orders and subcontracts and all other purchase orders and subcontracts,
including all modifications, made between the Third Party and the Transferor before the
effective date of this Agreement, whether or not performance and payment have been
completed and releases executed if the Third Party or the Transferor has any remaining
rights duties, or obligations under these purchase orders and subcontracts. Included in the
terms “purchase orders” and “subcontracts” are also all modifications made under the
terms and conditions of these purchase orders and subcontracts between the Third Party
and Transferee, on or after the effective date of this Agreement.
As of ___________________, the Transferor has transferred to the Transferee all the
assets of the Transferor by virtue of a ___________________ between the Transferor and
the Transferee.
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Novation Agreement
This Novation Agreement (hereinafter referred to as the “Agreement”) is entered into as
of ___________________, by and between:
___________________________, with a mailing address of _________________
______________________________ (hereinafter referred to as the “Transferor”);
___________________________, with a mailing address of _________________
______________________________ (hereinafter referred to as the “Transferee”);
___________________________, with a mailing address of _________________
______________________________ (hereinafter referred to as the “Third Party”).
The Transferor, Transferee, and Third Party are collectively referred to as the “Parties,”
all of whom agree to be bound by this Agreement.
THE PARTIES AGREE TO THE FOLLOWING FACTS:
The Third Party has entered into certain purchase orders and/or subcontracts with the
Transferor, namely: _______________________________________________________
_______________________________________________________________________
_______________________________________________________________________
The terms “purchase orders” and “subcontracts”, as used in this Agreement, means the
named purchase orders and subcontracts and all other purchase orders and subcontracts,
including all modifications, made between the Third Party and the Transferor before the
effective date of this Agreement, whether or not performance and payment have been
completed and releases executed if the Third Party or the Transferor has any remaining
rights duties, or obligations under these purchase orders and subcontracts. Included in the
terms “purchase orders” and “subcontracts” are also all modifications made under the
terms and conditions of these purchase orders and subcontracts between the Third Party
and Transferee, on or after the effective date of this Agreement.
As of ___________________, the Transferor has transferred to the Transferee all the
assets of the Transferor by virtue of a ___________________ between the Transferor and
the Transferee.
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T EMPLATEROLLER.COM
A. The Transferee has acquired all the assets of the Transferor by virtue of the
above transfer.
B. The Transferee has assumed all obligations and liabilities of the Transferor
under the purchase orders/subcontracts by virtue of the above transfer.
C. The Transferee is in a position to fully perform all obligations that may
exist under the purchase orders/subcontracts.
D. It is consistent with the Third Party’s interest to recognize the Transferee as
the successor party to the purchase orders/subcontracts.
E. Evidence of the above transfer has been filed with the Third Party on
___________________.
IN CONSIDERATION OF THESE FACTS, THE PARTIES AGREE THAT BY THIS
AGREEMENT:
1. The Transferor confirms the transfer to the Transferee, and waives any claims and
rights against the Third Party that it now has or may have in the future in
connection with the purchase orders and subcontracts.
2. The Transferee agrees to be bound by and to perform each purchase order and
subcontract in accordance with the terms and conditions contained in the purchase
order or subcontract. The Transferee also assumes all obligations and liabilities of,
and all claims against, the Transferor under each purchase order and subcontract as
if the Transferee were the original party to the purchase order and subcontract.
3. The Transferee ratifies all previous actions taken by the Transferor with respect to
the purchase orders and subcontracts, with the same force and effect as if the
actions had been taken by the Transferee.
4. The Third Party recognizes the Transferee as the Transferor’s successor in interest
in and to the purchase orders and subcontracts. The Transferee by this Agreement
becomes entitled to all rights, titles, and interests of the Transferor in and to the
purchase orders and subcontracts as if the Transferee were the original party to the
purchase orders and subcontracts. Following the effective date of this Agreement,
the terms “supplier” and “subcontractor” as used in purchase orders and
subcontracts, shall mean the Transferee.
5. Except as expressly provided in this Agreement, nothing in it shall be construed as
a waiver of any rights of the Third Party against the Transferor.
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6. All payments and reimbursements previously made by the Third Party to the
Transferor, and all other previous actions taken by the Third Party under the
purchase orders and subcontracts, shall be considered to have discharged those
parts of the Third Party’s obligations under the purchase orders and subcontracts.
All payments and reimbursements made by the Third Party after the date of this
Agreement in the name of or to the Transferor shall have the same force and effect
as if made to the Transferee, and shall constitute a complete discharge of the Third
Party’s obligations under the purchase orders and subcontracts, to the extent of the
amounts paid or reimbursed.
7. The Transferor and the Transferee agree that the Third Party is not obligated to
pay or reimburse either of them for, or otherwise give effect to, any costs, taxes, or
other expenses, or any related increases, directly or indirectly arising out of or
resulting from the transfer or this Agreement, other than those that the Third Party
in the absence of the transfer or this Agreement would have been obligated to pay
or reimburse under the terms of the purchase orders and subcontracts.
8. The Transferor guarantees payment of all liabilities and the performance of all
obligations that the Transferee (i) assumes under this Agreement or (ii) may
undertake in the future should these subcontracts and orders be modified under
their terms and conditions. The Transferor waives notice of, and consents to, any
such future modifications.
9. The purchase orders and subcontracts shall remain in full force and effect, except
as modified by this Agreement.
Each party has executed this Agreement to be effective as of the day and year specified
above. The Parties agree that this Agreement shall be additionally governed by the laws
of _____________________.
State
____________________
____________________
____________________
Transferor’s Printed Name
Transferee’s Printed Name
Printed Name of Third Party
____________________
____________________
____________________
Transferor’s Signature
Transferee’s Signature
Signature of Third Party
____________________
____________________
____________________
Date
Date
Date
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