Novation - Revision history

Editor at 18:04, 1 December 2021

2021-12-01T18:04:40Z

← Older revision		Revision as of 18:04, 1 December 2021
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	For more information see: Consultant switch.		For more information see: Consultant switch.

−	= Related articles on Designing Buildings ~~Wiki~~ =	+	= Related articles on Designing Buildings =

	* Architect.		* Architect.
	* Appointing consultants.		* Appointing consultants.
	* Assignment.		* Assignment.
		+	* Assignment of debt.
	* [[Blyth_%26_Blyth_Ltd_v_Carillion_Construction_Ltd\|Blyth & Blyth Ltd v Carillion Construction Ltd.]]		* [[Blyth_%26_Blyth_Ltd_v_Carillion_Construction_Ltd\|Blyth & Blyth Ltd v Carillion Construction Ltd.]]
	* Collateral warranties.		* Collateral warranties.

Designing Buildings at 05:19, 31 August 2020

2020-08-31T05:19:44Z

← Older revision		Revision as of 05:19, 31 August 2020
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	* KPK Research, Design and build, novation or consultant switch?		* KPK Research, Design and build, novation or consultant switch?

−	[[Category:Appointments]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Appointments]] [[Category:Procurement]]

Designing Buildings at 11:52, 28 March 2019

2019-03-28T11:52:21Z

← Older revision		Revision as of 11:52, 28 March 2019
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	* PACE [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Guidance on the Appointment of Consultants and Contractors] P126 guidance on novation.		* PACE [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Guidance on the Appointment of Consultants and Contractors] P126 guidance on novation.
	* [http://www.building.co.uk/news/finance/novation-without-tears/9246.article Building article: Novation without tears.]		* [http://www.building.co.uk/news/finance/novation-without-tears/9246.article Building article: Novation without tears.]
−	* ~~[http://www.kpkqs.com/download/2007%20Aug-KPK%20Research%20Digest%20-%20Novation%20Consultant%20Switch.pdf~~ KPK Research, Design and build, novation or consultant switch?]	+	* KPK Research, Design and build, novation or consultant switch?

	[[Category:Appointments]] [[Category:Procurement]]		[[Category:Appointments]] [[Category:Procurement]]

Designing Buildings: Reverted edits by MaryBerry (talk) to last revision by Designing Buildings

2019-01-11T13:03:43Z

Reverted edits by MaryBerry (talk) to last revision by Designing Buildings

← Older revision		Revision as of 13:03, 11 January 2019
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	For more information see: Consultant switch.		For more information see: Consultant switch.
−
−	~~-----~~
−	Novation is when one party can transfer all its obligations under a contract and all its benefits arising from that contract to a third party. It will bring an end to the original terms of engagement between the employer and the consultant (eg. the architect) and create a new form of agreement between the consultant and contractor. A new contract is created in place of the original one.
−
−	~~Advantage:~~
−
−	This can be beneficial to [https://www.designingbuildings.co.uk/wiki/Clients clients] as it maintains continuity between pre-[https://www.designingbuildings.co.uk/wiki/Tender tender] and [https://www.designingbuildings.co.uk/wiki/Post post]-[https://www.designingbuildings.co.uk/wiki/Tender tender] design whilst leaving sole responsibility for designing and [https://www.designingbuildings.co.uk/wiki/Building building] the [https://www.designingbuildings.co.uk/wiki/Project project] with the [https://www.designingbuildings.co.uk/wiki/Contractors contractor].
−
−	~~Disadvantage:~~
−
−	Once novated, contractually this means the contractor has been the architects employer from day one, as if the employer never existed. This can cause conflict of interest should the employer attempt to seek the architects advise.
−
−	~~-----~~
−	~~Assignment:~~
−
−	This occurs when the original party transfers only contractual right. Assignments are frequently used in relation to collateral warranties, whereby the benefit of a contract is transferred to a third party. An advantage of assignment is that only the benefit of the contract can be transferred by way of assignment, it is not possible to assign contractual burdens (obligations). A disadvantage of assignment is that the original contract is not extinguished so that the assignor remains liable under the contract.

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

MaryBerry at 18:49, 7 January 2019

2019-01-07T18:49:42Z

← Older revision		Revision as of 18:49, 7 January 2019
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	For more information see: Consultant switch.		For more information see: Consultant switch.
		+
		+	-----
		+	Novation is when one party can transfer all its obligations under a contract and all its benefits arising from that contract to a third party. It will bring an end to the original terms of engagement between the employer and the consultant (eg. the architect) and create a new form of agreement between the consultant and contractor. A new contract is created in place of the original one.
		+
		+	Advantage:
		+
		+	This can be beneficial to [https://www.designingbuildings.co.uk/wiki/Clients clients] as it maintains continuity between pre-[https://www.designingbuildings.co.uk/wiki/Tender tender] and [https://www.designingbuildings.co.uk/wiki/Post post]-[https://www.designingbuildings.co.uk/wiki/Tender tender] design whilst leaving sole responsibility for designing and [https://www.designingbuildings.co.uk/wiki/Building building] the [https://www.designingbuildings.co.uk/wiki/Project project] with the [https://www.designingbuildings.co.uk/wiki/Contractors contractor].
		+
		+	Disadvantage:
		+
		+	Once novated, contractually this means the contractor has been the architects employer from day one, as if the employer never existed. This can cause conflict of interest should the employer attempt to seek the architects advise.
		+
		+	-----
		+	Assignment:
		+
		+	This occurs when the original party transfers only contractual right. Assignments are frequently used in relation to collateral warranties, whereby the benefit of a contract is transferred to a third party. An advantage of assignment is that only the benefit of the contract can be transferred by way of assignment, it is not possible to assign contractual burdens (obligations). A disadvantage of assignment is that the original contract is not extinguished so that the assignor remains liable under the contract.

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

Designing Buildings at 15:44, 3 January 2019

2019-01-03T15:44:37Z

← Older revision		Revision as of 15:44, 3 January 2019
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	[[File:Projectwork.png\|link=File:Projectwork.png]]		[[File:Projectwork.png\|link=File:Projectwork.png]]
		+
		+	= Introduction =

	Novation is a process by which contractual rights and obligations are transferred from one party to another. Whilst the benefits of a contract can be transferred by assignment, if the parties wish to transfer both the benefits and the burdens then this must be done by a novation agreement.		Novation is a process by which contractual rights and obligations are transferred from one party to another. Whilst the benefits of a contract can be transferred by assignment, if the parties wish to transfer both the benefits and the burdens then this must be done by a novation agreement.
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	This can be beneficial to clients as it maintains continuity between pre-tender and post-tender design whilst leaving sole responsibility for designing and building the project with the contractor. Novation effectively over-writes the contractual history to give the impression that the consultant has worked for the contractor throughout the project		This can be beneficial to clients as it maintains continuity between pre-tender and post-tender design whilst leaving sole responsibility for designing and building the project with the contractor. Novation effectively over-writes the contractual history to give the impression that the consultant has worked for the contractor throughout the project

−	(NB. The process of novation in itself does not make a contractor responsible for any design carried out for the client prior to novating their contract. To achieve this the building contract needs to specifically state that the contractor has examined the design and adopted it).	+	NB. The process of novation in itself does not make a contractor responsible for any design carried out for the client prior to novating their contract. To achieve this the building contract needs to specifically state that the contractor has examined the design and adopted it.

−	~~-----~~	+	= Documentation =
−	~~Alternatively, there may be a 'consultant switch', which simply transfers the consultants from working for the client to working for the contractor, without altering the contractual history.~~	+

−	When there is a consultant switch, the original agreement between the consultant and the client terminates on appointment of the contractor, and there is then a new agreement between the contractor and the consultant.
−
−	This can be seen to provide better clarity of the contractual relationships. However, because the consultant’s liability to the client for pre-switch services remains, some argue that there is a greater risk of conflict of interest.
−
−	~~-----~~
	A novation agreement is not possible without consent. If novation and the form of novation agreement were not agreed when the consultant’s was initially appointed, they are under no obligation to agree to be novated. It is essential therefore that the principal contracts between client and consultants and between client and contractors contain express terms obliging the contractor and the consultant to enter into the novation agreement.		A novation agreement is not possible without consent. If novation and the form of novation agreement were not agreed when the consultant’s was initially appointed, they are under no obligation to agree to be novated. It is essential therefore that the principal contracts between client and consultants and between client and contractors contain express terms obliging the contractor and the consultant to enter into the novation agreement.

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	The process of novation can leave designers feeling they have mixed loyalties and there can be difficulty determining where liability lies for design work carried out before novation. If the contractor does not take on the design team effectively as if they had been the employer from the beginning therefore, it may be wise for them to obtain warranties for pre-novation services from the designers. The client may also require collateral warranties from novated designers (see [[Blyth_%26_Blyth_Ltd_v_Carillion_Construction_Ltd\|Blyth & Blyth Ltd v Carillion Construction Ltd]]).		The process of novation can leave designers feeling they have mixed loyalties and there can be difficulty determining where liability lies for design work carried out before novation. If the contractor does not take on the design team effectively as if they had been the employer from the beginning therefore, it may be wise for them to obtain warranties for pre-novation services from the designers. The client may also require collateral warranties from novated designers (see [[Blyth_%26_Blyth_Ltd_v_Carillion_Construction_Ltd\|Blyth & Blyth Ltd v Carillion Construction Ltd]]).

−	~~Advantages:~~	+	= Consultant switch =

−	a~~) Overall project duration is shorter due~~ to ~~overlapping design and construction<br />~~	+	As an alternative to novation, there may be a 'consultant switch', which simply transfers the consultants from working for the client to working for the contractor, without altering the contractual history.
−	~~b) There is~~ contractor ~~contribution to~~ the ~~design and planning process<br />~~	+
−	~~c) Changes can be accommodated in packages not yet let if they have no further impact d) The works are let competitively at current market prices on a firm price basis~~	+

−	~~Disadvantages?~~	+	When there is a consultant switch, the original agreement between the consultant and the client terminates on appointment of the contractor, and there is then a new agreement between the contractor and the consultant.

−	~~a) The price for~~ the ~~works is not received until~~ the ~~last package has been let<br />~~	+	This can be seen to provide better clarity of the contractual relationships. However, because the consultant’s liability to the client for pre-switch services remains, some argue that there is a greater risk of conflict of interest.
−	~~b) Changes~~ to the ~~design of later packages may affect packages already let~~ - ~~expensive<br />~~	+
−	~~c) There~~ is ~~little incentive for the MC to reduce costs<br />~~	+
−	~~d) May become~~ a ~~‘post box’ system<br />~~	+
−	~~e) In practice, the MC has little legal responsibility for the defaults~~ of ~~the works contractors~~	+

−	~~= Find out~~ more =	+	For more information see: Consultant switch.

−	=== Related articles on Designing Buildings Wiki ===	+	= Related articles on Designing Buildings Wiki =

	* Architect.		* Architect.
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	* The Contracts (Rights of Third Parties) Act.		* The Contracts (Rights of Third Parties) Act.

−	=== External references ===	+	= External references =

	* PACE [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Guidance on the Appointment of Consultants and Contractors] P126 guidance on novation.		* PACE [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Guidance on the Appointment of Consultants and Contractors] P126 guidance on novation.

Designing Buildings at 15:40, 3 January 2019

2019-01-03T15:40:28Z

← Older revision		Revision as of 15:40, 3 January 2019
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	Alternatively, there may be a 'consultant switch', which simply transfers the consultants from working for the client to working for the contractor, without altering the contractual history.		Alternatively, there may be a 'consultant switch', which simply transfers the consultants from working for the client to working for the contractor, without altering the contractual history.

−	When there is a consultant switch, the original ~~[https://www.designingbuildings.co.uk/wiki/Agreement~~ agreement] between the ~~[https://www.designingbuildings.co.uk/wiki/Consultants~~ consultant] and the ~~[https://www.designingbuildings.co.uk/wiki/Clients~~ client] terminates on appointment of the ~~[https://www.designingbuildings.co.uk/wiki/Contractor~~ contractor], and there is then a new ~~[https://www.designingbuildings.co.uk/wiki/Agreement~~ agreement] between the ~~[https://www.designingbuildings.co.uk/wiki/Contractor~~ contractor] and the ~~[https://www.designingbuildings.co.uk/wiki/Consultants~~ consultant].	+	When there is a consultant switch, the original agreement between the consultant and the client terminates on appointment of the contractor, and there is then a new agreement between the contractor and the consultant.

−	This can be seen to provide better clarity of the contractual relationships. However, because the ~~[https://www.designingbuildings.co.uk/wiki/Consultants consultant]’s [https://www.designingbuildings.co.uk/wiki/Liability~~ liability] to the ~~[https://www.designingbuildings.co.uk/wiki/Clients~~ client] for pre-switch ~~[https://www.designingbuildings.co.uk/wiki/Services~~ services] remains, some argue that there is a greater ~~[https://www.designingbuildings.co.uk/wiki/Risk~~ risk] of ~~[https://www.designingbuildings.co.uk/wiki/Conflict_of_interest~~ conflict of interest].	+	This can be seen to provide better clarity of the contractual relationships. However, because the consultant’s liability to the client for pre-switch services remains, some argue that there is a greater risk of conflict of interest.

	-----		-----

Rhea1910 at 14:06, 2 January 2019

2019-01-02T14:06:06Z

← Older revision		Revision as of 14:06, 2 January 2019
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	(NB. The process of novation in itself does not make a contractor responsible for any design carried out for the client prior to novating their contract. To achieve this the building contract needs to specifically state that the contractor has examined the design and adopted it).		(NB. The process of novation in itself does not make a contractor responsible for any design carried out for the client prior to novating their contract. To achieve this the building contract needs to specifically state that the contractor has examined the design and adopted it).

		+	-----
	Alternatively, there may be a 'consultant switch', which simply transfers the consultants from working for the client to working for the contractor, without altering the contractual history.		Alternatively, there may be a 'consultant switch', which simply transfers the consultants from working for the client to working for the contractor, without altering the contractual history.

		+	When there is a consultant switch, the original [https://www.designingbuildings.co.uk/wiki/Agreement agreement] between the [https://www.designingbuildings.co.uk/wiki/Consultants consultant] and the [https://www.designingbuildings.co.uk/wiki/Clients client] terminates on appointment of the [https://www.designingbuildings.co.uk/wiki/Contractor contractor], and there is then a new [https://www.designingbuildings.co.uk/wiki/Agreement agreement] between the [https://www.designingbuildings.co.uk/wiki/Contractor contractor] and the [https://www.designingbuildings.co.uk/wiki/Consultants consultant].
		+
		+	This can be seen to provide better clarity of the contractual relationships. However, because the [https://www.designingbuildings.co.uk/wiki/Consultants consultant]’s [https://www.designingbuildings.co.uk/wiki/Liability liability] to the [https://www.designingbuildings.co.uk/wiki/Clients client] for pre-switch [https://www.designingbuildings.co.uk/wiki/Services services] remains, some argue that there is a greater [https://www.designingbuildings.co.uk/wiki/Risk risk] of [https://www.designingbuildings.co.uk/wiki/Conflict_of_interest conflict of interest].
		+
		+	-----
	A novation agreement is not possible without consent. If novation and the form of novation agreement were not agreed when the consultant’s was initially appointed, they are under no obligation to agree to be novated. It is essential therefore that the principal contracts between client and consultants and between client and contractors contain express terms obliging the contractor and the consultant to enter into the novation agreement.		A novation agreement is not possible without consent. If novation and the form of novation agreement were not agreed when the consultant’s was initially appointed, they are under no obligation to agree to be novated. It is essential therefore that the principal contracts between client and consultants and between client and contractors contain express terms obliging the contractor and the consultant to enter into the novation agreement.

Rhea1910 at 13:56, 2 January 2019

2019-01-02T13:56:51Z

← Older revision		Revision as of 13:56, 2 January 2019
Line 20:		Line 20:

	The process of novation can leave designers feeling they have mixed loyalties and there can be difficulty determining where liability lies for design work carried out before novation. If the contractor does not take on the design team effectively as if they had been the employer from the beginning therefore, it may be wise for them to obtain warranties for pre-novation services from the designers. The client may also require collateral warranties from novated designers (see [[Blyth_%26_Blyth_Ltd_v_Carillion_Construction_Ltd\|Blyth & Blyth Ltd v Carillion Construction Ltd]]).		The process of novation can leave designers feeling they have mixed loyalties and there can be difficulty determining where liability lies for design work carried out before novation. If the contractor does not take on the design team effectively as if they had been the employer from the beginning therefore, it may be wise for them to obtain warranties for pre-novation services from the designers. The client may also require collateral warranties from novated designers (see [[Blyth_%26_Blyth_Ltd_v_Carillion_Construction_Ltd\|Blyth & Blyth Ltd v Carillion Construction Ltd]]).
		+
		+	Advantages:
		+
		+	a) Overall project duration is shorter due to overlapping design and construction<br />
		+	b) There is contractor contribution to the design and planning process<br />
		+	c) Changes can be accommodated in packages not yet let if they have no further impact d) The works are let competitively at current market prices on a firm price basis
		+
		+	Disadvantages?
		+
		+	a) The price for the works is not received until the last package has been let<br />
		+	b) Changes to the design of later packages may affect packages already let - expensive<br />
		+	c) There is little incentive for the MC to reduce costs<br />
		+	d) May become a ‘post box’ system<br />
		+	e) In practice, the MC has little legal responsibility for the defaults of the works contractors

	= Find out more =		= Find out more =

Editor at 12:32, 16 August 2018

2018-08-16T12:32:32Z

← Older revision		Revision as of 12:32, 16 August 2018
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	* Designers.		* Designers.
	* Design and build.		* Design and build.
		+	* Design and build - pros and cons.
	* Detailed design.		* Detailed design.
	* Difference between assignment and novation.		* Difference between assignment and novation.