Jurisdiction(s):
United Kingdom

Key definition

Contract definition

What does Contract mean? In legal practice, a contract is the enforceable agreement by which parties set out promises and allocate risk, whether made orally, in writing or by conduct. The law of contract is principally case-law driven across England & Wales, Scotland, Northern Ireland and Ireland, with statutory interventions on formalities, construction and consumer protection. In England & Wales, Northern Ireland and Ireland, formation generally requires offer, acceptance, consideration and an intention to create legal relations. In Scotland, consideration is not required; a contract is formed by agreement (consensus in idem) with the necessary intention, with writing only needed in defined cases. Key features...

Novating Commercial Contracts: Legal Framework, Alternatives to Novation, Drafting Requirements and Practical Considerations

Published by a LexisNexis Commercial expert

Practice notes

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Practice Note overview

This Practice Note is a practical ‘how to’ on novating commercial contracts and directs readers to related materials. It covers:

a summary of novation
how novation differs from assignment
when novation is the suitable route
the elements needed for a valid novation
other legal issues to consider
practical tips for novating an agreement

Sometimes, instead of simply assigning the benefit of an agreement to a third party, the original parties also wish to transfer their obligations and responsibilities. That outcome can be achieved by novating the contract. For fuller guidance on the law around contractual novation, see Practice Note: Novation—why and how to novate a contract. For a practical, detailed checklist when you need to novate an agreement, see: Drafting and negotiating a novation—checklist.

What is a contract novation?

Novation arises where an outgoing party passes its rights and obligations under the agreement to an incoming party, so the incoming party effectively steps into the outgoing party’s place and a contractual link is formed between the remaining party and the incoming party. The result is that the original contract is extinguished and replaced with a new agreement, under which the same rights...

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Web page updated on 21/05/2026

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