Since novation has the effect of transferring both your rights and obligations to a third-party, the previous contract will effectively be extinguished.
A new contract is then formed between the other party to the previous contract, and the third-party. Your contract may expressly exclude or limit the right to novate.
benefits) of your contract to another person, an assignment is the appropriate choice for you.
For example, you may want to assign the right to receive cash payouts from your life insurance or endowment plans to a loved one, for his/her benefit.
If not all of the requirements have been met, the assignment will still be valid.
However, the assignee will not be able to sue the other party to the contract directly.If you would like to transfer both the rights and obligations under a contract to another party, then a novation is the appropriate choice.For example, when selling your business, you may wish to novate your existing contracts with your suppliers to the new business owner, so that any outstanding debts under these contracts will be transferred to him.As explained in the REC contract, assignments may be subject to fees, and may in certain circumstances require the Buyer’s consent to be effectuated.An entire REC contract or any product orders/batches under a contract may be assigned in their entirety.The requirements for assignment are: Contracts can be assigned without the consent of the other party to the contract.If all the above requirements are met, the assignee will have the right to sue the other party to the contract for the benefits provided under it (if required).A novation can also arise through the parties’ conduct.For example, sending a notice of novation to the other parties of the original contract can suffice.Commercial contracts may also contain a clause expressly excluding or limiting their assignment unless certain conditions have been fulfilled.Here is a sample restriction of assignment clause: “Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties.