Deed of Novation Template and How to Draft One (2026)

What is a deed of novation, and when do you need one? A deed of novation transfers a contract from one party to another so that the new party takes over both the rights and the obligations, and the outgoing party is released. It needs the agreement of all three sides: the party leaving (the outgoing party), the party taking over (the incoming party), and the party staying in the contract (the continuing party). You need one whenever a contract has to move to a different entity: a business is sold and its supply contracts must pass to the buyer, a group reorganises and contracts move between companies, or a service provider is replaced mid-contract. Novation is different from assignment. An assignment transfers only the benefit (the rights) of a contract, and the original party usually stays on the hook for the obligations. Novation transfers the whole contract, rights and obligations, and releases the outgoing party, which is why the continuing party must consent. Novation is usually done as a deed so it is enforceable even where there is no fresh consideration from every party. Below is a deed of novation template you can copy and adapt, followed by guidance on how to fill each clause. This is general information, not legal advice. For a valuable or complex contract, have a lawyer review the deed and confirm execution formalities, which vary by jurisdiction. ## Deed of novation template ```

DEED OF NOVATION This Deed of Novation ("Deed") is made on [DATE] BETWEEN: (1) [OUTGOING PARTY NAME], [address] ("Outgoing Party"); (2) [INCOMING PARTY NAME], [address] ("Incoming Party"); and (3) [CONTINUING PARTY NAME], [address] ("Continuing Party"). BACKGROUND: A. The Outgoing Party and the Continuing Party entered into [the Original Contract: title, date] (the "Original Contract"). B. The Outgoing Party wishes to transfer its rights and obligations under the Original Contract to the Incoming Party, who agrees to accept them, and the Continuing Party consents to this novation. IT IS AGREED: 1. NOVATION 1.1 With effect from [EFFECTIVE DATE] (the "Novation Date"), the Incoming Party is substituted for the Outgoing Party under the Original Contract. 1.2 The Incoming Party assumes and will perform all obligations of the Outgoing Party under the Original Contract arising on or after the Novation Date, and is entitled to all its rights. 2. RELEASE OF THE OUTGOING PARTY 2.1 The Continuing Party releases the Outgoing Party from all obligations under the Original Contract arising on or after the Novation Date. 2.2 [Accrued rights option A: the Outgoing Party remains liable for obligations that accrued before the Novation Date.] OR [Option B: the Continuing Party also releases the Outgoing Party from accrued obligations, and the Incoming Party assumes them.] 3. CONTINUING PARTY'S OBLIGATIONS 3.1 The Continuing Party will perform the Original Contract in favour of the Incoming Party as if the Incoming Party had always been a party to it. 4. REPRESENTATIONS 4.1 Each party has the power to enter into this Deed and doing so does not breach any other obligation. 4.2 The Original Contract is in full force and, so far as each party is aware, no party is in breach of it. 5. CONTRACT TERMS UNCHANGED 5.1 Except as novated by this Deed, the Original Contract continues unchanged and binds the Incoming Party and the Continuing Party. 6. COSTS AND STAMP DUTY 6.1 Each party bears its own costs. [Stamp duty, if any, is borne by [party].] 7. GOVERNING LAW 7.1 This Deed is governed by the laws of [JURISDICTION] and the courts of [PLACE] have jurisdiction [or: disputes are referred to arbitration at [PLACE]]. EXECUTED AS A DEED by the parties on the date above. Outgoing Party: ____________________ [witness/attestation as required] Incoming Party: ____________________ [witness/attestation as required] Continuing Party: ____________________ [witness/attestation as required]