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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.
A novation occurs when there is a rescission of one contract and the substitution of a fresh contract in which the original contractual obligations are carried out by different parties.
In building design and construction, novation normally refers to the process by which design consultants are initially contracted to the client, but are then 'novated' to the contractor.
This is common on design and build projects where the design team are appointed by a client to carry out initial studies or prepare a concept or detailed design, but then when a contractor is appointed to carry out or complete the design and construct the works, the design team (or part of it) is novated to work for them.
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