The remaining part is the other initial part of the contract that must approve Novation`s deliberation if you wish to perform the contract as an instrument. The third party effectively replaces one of the contracting parties. All services and expenses arising from the contract are transferred to this third party. This novation agreement allows a party to replace or replace another part of an original contract, A and B, with a new contract and a new part, A and C. This document also contains the context of the novation as well as the reason for the novation. It also includes the option of compensations that protect the parties after novation. Advice on formulating tailor-made conditions in a novation letter When a transaction is executed, there are periods when certain details of a given contract or agreement need to be changed instead of entering into a new contract, a novation instrument is used to make the changes mentioned in the agreement or contract. When real estate is sold, acquired or transferred, a title or document must be drafted. When a property is purchased, the mortgage is chosen by people who have a legal obligation to pay. However, if this legal obligation to repay the mortgage loan is transferred to a third party, the novation instrument must be held liable. A certificate of novation should not be confused with the award.