Assignment & Novation

Querist : Anonymous (Querist) 01 February 2010 This query is : Resolved
Greetings to Experts,

What is the difference between an assignment and a novation?

When an assignment is made, who is responsible for the liabilities that arise under that agreement, the assignor or assignee? Please explain.

Thanks in advance

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Sachin Bhatia (Expert) 01 February 2010
Visit following link:

http://www.netlawman.co.uk/info/novation-assignment.php

A V Vishal (Expert) 01 February 2010
Novation is a term used in contract law and business law to describe the act of either replacing an obligation to perform with a new obligation, or replacing a party to an agreement with a new party. In contrast to an assignment, which is valid so long as the obligee (person receiving the benefit of the bargain) is given notice, a novation is valid only with the consent of all parties to the original agreement: the obligee must consent to the replacement of the original obligor with the new obligor. A contract transferred by the novation process transfers all duties and obligations from the original obligor to the new obligor.

The criteria for novation comprise the obligee's acceptance of the new obligor, the new obligor's acceptance of the liability, and the old obligor's acceptance of the new contract as full performance of the old contract.