Novation in engineering and construction projects
Assignment and novation are important legal topics with real ramifications for parties if they are not dealt with properly. The idea behind them is simple and easier to grasp when having an understanding of the way in which they work.
Novation is an important feature of engineering and construction projects — particularly in relation to design and build procurement. The novation of the design consultants’ appointments to the main building contractor is a common example. Novation must be executed properly and achieved correctly; if this does not happen, the effect can be the loss of a party’s legal rights altogether.
Novation is the legal name given to the mechanism by which contractual rights and obligations are transferred from one party to another. The process can also be viewed as a substitution. So, for example, if a contract entered into between A and B is ‘novated’ to C, the result is that C has ‘stepped into the shoes’ of B. The original contract is extinguished and is replaced by a new contract between A and C; C takes on the rights and obligations of B under the original contract. The substitution takes place by a novation between all three parties — A, B and C — as shown in the diagram in this briefing…
If you are registered and logged in to the site, click on the link below to read the rest of the DLA Piper briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from DLA Piper
News from The Lawyer
Briefings from DLA Piper
The Australian Taxation Office released a draft ruling on the Goods and Services Tax treatment of bitcoin transactions on 20 August 2014.
DLA Piper’s ‘Life sciences: patent extension strategies and antitrust global update’ video covers global antitrust and competition issues including product hopping and reverse payment patents.
Analysis from The Lawyer
Regulators are ramping up the pressure in the aftermath of recession, leaving firms to compete for compliance and restructuring work
Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. Private equity house Bridgepoint is one outfit that has had its head turned by the US firm.