Novation Agreement Template
Novation agreement template for a new person to become party to and bound by an agreement in place of one of the original parties. The original party is released from its obligations under the agreement.
Read more
When do I use this document?
- for the novation of a contract or agreement
- for a new party to replace one of the original parties to the contract
- where the other original party to the contract consents to the novation
- for a contract governed by English law
What are the key features?
- 9 clauses over 3 pages
- agreement in the form of a Deed of Novation
- wording for replacement party to become party to the novated contract
- alternative wording depending on whether the replaced party will be discharged from:
- all liability under the contract from its commencement
- liability under the contract from the date of novation
- indemnity from the new party in favour of the replaced party for failure to perform the novated contract
What else do I need to know?
A novation agreement template is used where the original parties to the agreement have agreed that a new party should replace one of them and assume the obligations and liabilities of the replaced party.
Novation is an alternative to assignment – assignment of a contract can only apply to the benefit of a contract, which are the rights of a party under the contract. The burden of a contract (the party’s performance obligations) cannot be assigned under English law. If one party wants to transfer both the benefit and the burden of a contract, the contract will need to be novated.
Under a novation, the contract is effectively replaced with a new contact and the new party to the contract is treated as an original party to the contract in place of the departing party. Novation requires the consent of the remaining original party to the contract and is documented in a novation agreement or deed of novation between the three parties.
Under the novation agreement:
- the original parties to the agreement agree that the new party takes the place of one of the original parties
- the new party agrees to perform the obligations of the replaced party and the remaining party agrees to accept the new party’s undertaking to perform these obligations
- the new party can either agree to be liable for all the obligations of the replaced party from the start of the agreement or only for its own performance obligations from the date of novation
What other documents are available?
For a template contract assignment, see
When do I use this document?
- where one or more shareholders wish to remove a director
- where the Articles of Association do not include a simpler removal process
- as special notice pursuant to the Companies Act 2006 to remove a director
Key features
- special notice required to remove a director from office
- including an ordinary resolution to remove a director, for use by either a single shareholder or multiple shareholders
- alternative forms covering:
- removal of director only
- removal of director and appointment of replacement director
What else do I need to know?
Under section 168 of the Companies Act 2006, shareholders can remove a director by passing an ordinary resolution at a general meeting. This decision cannot be made by written resolution. The shareholder proposing the removal must give formal notice to the company. The Articles of Association cannot override this statutory process or change the notice periods required for the process.
Once the company receives special notice, the board must call a shareholder meeting. This meeting must take place at least 28 days after the notice is received. The director facing removal has the right to submit written representations, which the company must circulate to shareholders before the meeting.
The special notice may also propose appointing a new director to replace the one being removed.
In some companies, weighted voting rights can protect shareholder-directors being removed from office by granting them extra votes on removal resolutions. This is common in joint ventures, multi-shareholder businesses, or investor agreements where director rights need protection.
Being removed as a director does not affect employment rights, but it may lead to legal claims, such as wrongful dismissal. If the removed director is also a shareholder, they may claim unfair prejudice under the Companies Act 2006 – particularly in quasi-partnerships, where they expected to be involved in management. If the claim succeeds, the court may order other shareholders to buy their shares at fair value.
Related Articles
£25.00 exc VAT
Updated by a lawyer on 31/07/2025
- Updated By a lawyer on
- Guidance notes included
- No hidden extras
- Easily customisable
Create your document in 3 Easy Steps
- Download
- Customise
- Share & Sign
PaperRock offers affordable, legal document templates, written by experienced and expert lawyers, trusted by businesses across the UK and beyond. No hidden charges or trial sign-ups are required to complete your document.
“I have worked in legal and business affairs for over 25 years and need access to a wide range of corporate and commercial legal precedents. Paperrock is a refreshing source of high-quality legal templates. Superb value for money.”
Amanda | Bannister Creative
£25.00 exc VAT
- Written by expert lawyers
- Quick to download
- Easy to customise
- No hidden extras
- free re-downloads
“It’s hard to find legal documents on the internet you can really trust. Knowing an expert lawyer has drafted what I need, gives my business the edge and gives me peace of mind.”
Elle, Founder | Winslow skincare & aesthetics.
“As an SME Paperrock saves us the legal fees we’ve previously had to spend. In these challenging times that's a big help. Great products and support.”
Giles, MD | Boniti Ltd.
