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To novate is to replace an old obligation with a new one. In contract law, a novation replaces one of the parties in a two-party agreement with a third party, with the agreement of all three parties. In a novate, the original contract is void.
Novation is a legal term that describes the process by which the rights and obligations of a party to a contract are transferred to another. The party transferring its rights and obligations effectively walks away, and has their contract transferred with a new party taking over.
Transmission agreements contain interconnection rules, the connection code and outage protocol. They must also be consistent with the grid reliability standards.
The Novation Agreement for the Transfer of Ownership is an agreement between the parties to novate the time charter party from the original owners to the new owners on terms set out in the agreement. The latest edition of this contract is the Novation Agreement for the Transfer of Ownership, issued in 2016.
An example, of novation may be when a small supplier/business changes location and finds their business customer another source to replace them directly.
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