Novation Deed (Asset Sales)
This Novation Deed (Asset Sales) is used because English law allows the benefit of a contract (i.e. payment or receipt of goods or services) to be assigned but the burden (i.e. obligations) cannot be assigned without the consent of the other contracting party. The assets sale agreements state that the parties will use reasonable endeavours to obtain third party consent for the contracts assigned under it. However, a novation deed ensures certainty because the Buyer, the Seller and the other contracting party enter into a tripartite agreement where the Buyer steps into the shoes of the Seller and the Buyer will usually assume liability for the obligations of the Seller at the point of novation. This Novation Deed (Asset Sales) can be used to novate either the Contracts or the agreements affecting the Third Party Assets.
Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
This deed is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.
The document is a deed and so it should be executed by two directors or one director and a secretary of the Seller, the Buyer and the other contracting party respectively.
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