Novated Contract for Germany

Novated Contract Template for Germany

This document is a Novated Contract governed by German law, specifically structured under the provisions of the German Civil Code (Bürgerliches Gesetzbuch - BGB). It facilitates the legal transfer of rights and obligations from one party to another while maintaining the contract with a continuing party. The document incorporates specific German legal requirements for novation, including detailed provisions for the transfer of obligations (Schuldübernahme) and rights (Abtretung). It ensures compliance with German contract law while providing a clear framework for the substitution of parties and the continuation of contractual obligations under the new arrangement.

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What is a Novated Contract?

The Novated Contract is a specialized legal instrument used in German business and commercial contexts when one party needs to be replaced in an existing contractual relationship. This document is particularly relevant when companies undergo restructuring, mergers, acquisitions, or when business relationships need to be reassigned to different entities. It must comply with the German Civil Code (BGB) requirements for novation and contract formation, including specific provisions for the transfer of rights (Abtretung) and obligations (Schuldübernahme). The document includes detailed sections covering the release of the original party, assumption of obligations by the new party, and consent of the continuing party, along with any specific terms required under German law to ensure the legal validity of the novation.

What sections should be included in a Novated Contract?

1. Parties: Identification of all three parties: the original contracting party (Ursprüngliche Partei), the new party (Neue Partei), and the continuing party (Fortbestehende Partei)

2. Background: Details of the original contract, reasons for novation, and confirmation that all parties agree to the novation

3. Definitions: Definitions of key terms, including 'Original Contract', 'Novation Date', and other relevant terms

4. Release of Original Party: Formal release of the original party from their obligations under the original contract

5. Transfer of Rights and Obligations: Explicit transfer of rights and obligations from the original party to the new party

6. Assumption by New Party: New party's formal assumption of the original party's rights and obligations

7. Continuing Party's Consent: Explicit consent of the continuing party to the novation

8. Effective Date: Specification of when the novation takes effect

9. Outstanding Obligations: Treatment of any accrued rights, obligations, or liabilities prior to the novation date

10. Representations and Warranties: Standard representations and warranties from all parties

11. Governing Law and Jurisdiction: Confirmation of German law as governing law and jurisdiction for disputes

12. Execution: Signature blocks for all three parties

What sections are optional to include in a Novated Contract?

1. Costs and Expenses: Allocation of costs related to the novation, used when significant costs are involved

2. Tax Provisions: Special tax considerations and allocations, included when there are significant tax implications

3. Confidentiality: Confidentiality obligations, included when sensitive information is involved

4. Partial Novation: Used when only certain rights and obligations are being transferred

5. Transitional Provisions: Included when there needs to be a transitional period for the transfer

6. Third Party Rights: Addressing rights of third parties, included when third party interests are affected

7. Data Protection: GDPR and data protection provisions, required when personal data is involved

What schedules should be included in a Novated Contract?

1. Original Contract: Copy of the original contract being novated

2. Outstanding Obligations Schedule: Detailed list of any outstanding obligations as of the novation date

3. Assets and Liabilities Schedule: Detailed list of specific assets and liabilities being transferred

4. Completion Requirements: List of actions or documents required to complete the novation

5. Required Consents: List of third-party consents required for the novation

6. Powers of Attorney: Any required powers of attorney for executing the novation

7. Transfer Documents: Any additional transfer documents required under German law

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Manufacturing

Construction

Real Estate

Information Technology

Professional Services

Healthcare

Energy

Telecommunications

Transportation and Logistics

Retail

Insurance

Relevant Teams

Legal

Compliance

Finance

Procurement

Commercial

Risk Management

Corporate Secretariat

Business Development

Operations

Contract Administration

Relevant Roles

Legal Counsel

Contract Manager

Chief Legal Officer

Business Development Manager

Commercial Director

Procurement Manager

Corporate Secretary

Compliance Officer

Risk Manager

Chief Financial Officer

Project Manager

Operations Director

General Counsel

Legal Administrator

Business Unit Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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