The following Construction guidance note provides comprehensive and up to date legal information covering:
This Practice Note looks at the standard form novation agreements published by the City of London Law Society (CLLS) and the Construction Industry Council (CIC). In relation to the CIC novation agreement, this Practice Note considers the ‘switch’ edition published in 2004—in 2018 the CIC released an ‘ab initio’ novation agreement (revised in 2019) and we will be publishing new content on this in due course.
Novation is now a very common feature in construction projects. It occurs in a number of different scenarios but has, in particular, become accepted practice on projects procured on a design and build basis. For more on novation in general, see Practice Note: Novation in construction projects.
It is common for parties involved in construction projects to use their own, bespoke forms of novation agreement and, as a result, there are very many different forms in circulation. However, in 2004, two standard forms were published—one by the construction committee of the CLLS and one by the CIC. Both are short and uncomplicated documents which have avoided including any superfluous provisions, but they take different approaches to novation of the consultant. They do, however, both address the key problems arising out of Blyth & Blyth v Carillion, and the 'no loss' argument (see Practice Notes: Novation in construction projects and The 'no loss' defence in construction contracts).
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