Effect Of Novation Of Contract: A Critical Analysis

Soumya Sharma, 1st Year, BA.LL.B., School of Law, Narsee Monjee Institute of Management Studies, Bengaluru

ABSTRACT

Before dealing with questions raised in contracts regarding novation or assignment clauses, this paper investigates the essence of novation as it affects ICT contracts and contractual rights in general. One of the mechanisms for swapping or assigning duties and obligations under an existing contract to new parties is novation. The paper identifies recognised mechanisms for transferring obligations and examines the presumed assignment of obligations by contrasting the position of the law in other common-law jurisdictions. Due to issues arising under common law, statutory provisions, and the drafting of assignment clauses and related documents, the state of the law in Nigeria on the assignment or transfer of contractual obligations is unusually complicated. As seen in various judicial pronouncements, the basic principle of contract law in Nigeria suggests that the assignment or transfer of contractual obligations is unclear. Unfortunately, several of these challenges can be attributed to the lack of a well-established system of contract law in Nigeria, as well as strong judicial precedents on the subject. As a result, it is the position of this paper that the novation principle of law must be clarified in order to reduce uncertainty in its application by parties and enforcement by the court.

Keywords: law of contract, privity of contract, assignment, novation