11 What is novation?

A novation is different to an assignment as in a novation there is no assignment of rights and obligations but rather the creation of new rights and obligations in a new agreement.
In the formal sense, a third party will become a ‘substituted contracting party’ by a novation of the original agreement. Novation will ordinarily require the agreement of the original and the substituted party.
Novation is the only way in which a party can effectively ‘transfer’ all its rights and obligations under an agreement to the ‘substituted contracting party’.