The CLLS form guidelines advertise it as “a simple customizable document for a multitude of different contexts and with the different forms of standard forms and tailor-made consulting contracts that exist on the market”. It is certainly a simple document with only 3 clauses. The first concerns the novation itself and the second and third the jurisdiction or rights of third parties. Novation agreements are intended to be used in case of novices of an advisor mandated by a client or a developer to a new customer who may be a design and construction contractor, another developer or another organization. A Novation Agreement – Switch and the associated warranty guarantee will also be published in the near future. That judgment was based on the fact that the judge had decided that the damages to which Carillon was entitled should be limited by the extent to which the employer could have recovered as a result of the offences. Since the employer could only have claimed minimal losses, Carillion was unable to compensate for the significant losses it claimed to have suffered. The judge found (and the parties agreed) that the novation agreement had become an assignment of the employer`s rights due to misrepresentation and that it did not justify new obligations. Therefore, as with all contracts, the contractor was only able to assert its losses to the extent that the original part of the order (the employer) would have suffered such losses in order to assert the rights available to the employer prior to the innovation. It is understandable that this decision has led contractors to be cautious in formulating novation agreements, as they want to ensure that they can assert their own losses against consultants in the event of infringement before novation. As stated above, the CLLS form does not contain any guarantee to the employer.
The guidelines cite the Blyth & Blyth case, in which they doubted the effectiveness of the novation agreement because it contained a guarantee to the employer. Nor did they include “step-in” rights, i.e. when the employer regains his rights of instruction from the advisor when ordering the end of the construction contract (for example. B in the event of the insolvency of the contractor). As with the guarantee to the employer, the CLLS considered that it kept the clarity by keeping these additional provisions separate. Again, the guidelines cite the Blyth & Blyth case, in which the judge found that the inclusion of such rights was inconsistent with the normal legal concepts of novation. The recent publication of two new standard novation instruments has created confusion in the management of Novation in the construction industry. CIC announced the publication of a new suite of contracts for the novation of standard forms and guarantee guarantees: the employer of all obligations to the advisor. . . .