Assignment vs Novation in Contract Law

Assignment transfers benefits (rights) under a contract to a third party, but the original party remains liable for the obligations.
Novation, on the other hand, replaces one party in the contract entirely — transferring both rights and obligations, and requires the consent of all parties involved.

✅ Use assignment when you only want to transfer the right to receive something (like money).

✅ Use novation when you want to substitute a party completely — as if the new party was there from the beginning.

Always document novation clearly — it extinguishes the old contract and creates a new one.

O. Agho Esq.