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UK Solicitor John
UK Solicitor John, Solicitor
Category: Law
Satisfied Customers: 355
Experience:  8 years legal experience
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I have a question around novation of a contract, I am based

Customer Question

Hi, I have a question around novation of a contract
JA: Where are you? It matters because laws vary by location.
Customer: I am based in the uk
JA: What steps have you taken so far?
Customer: I have spoken to a few lawyers but I seem to have differing opinions. Would you be able to help?
JA: Anything else you want the Lawyer to know before I connect you?
Customer: I have a contract with a company A to build my house. During the project, the sole director of Company A writes to me and says that the contractor will now be Company B (where he is the sole director). Company B works on my build and gets paid for it in accordance to the contract. However, company B then abandons site. Has the contract been novated to Company B or just assigned (in which case Company A would still be liable)?
Submitted: 13 days ago.
Category: Law
Customer: replied 13 days ago.
The written correspondence from Company A outlining the transfer of the contractor to Company B is at the bottom of the email
Expert:  JimLawyer replied 13 days ago.

Hello, this is Jim and I am a dual-qualified lawyer (UK and Republic of Ireland) and happy to help you this evening.

For some reason I cannot open the attachment. However, it seems the contract was novated, so a new contract created whereby the original company is no longer liable but he new one it. I doubt this is an assignment as for that to work, the obligations under the contract cannot be assigned (the burden cannot be assigned, only the rights and benefits under the contract can be assigned). The novation can be implied by conduct, or accepted verbally or in writing. I am fairly certain your situation is a novation and Company B would be liable here. It is a clear case of substitution of one party for another (therefore, a novation situation).

I hope this helps – if you can please rate the answer by clicking the 5 stars (the top of your screen & then click “submit”), I can answer follow up Q&A's at no extra charge and I will be credited for helping you today.

Many thanks,

Jim

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Customer: replied 12 days ago.
Thanks Jim. In my building contract (JCT Design and Build 2016), I have an adjudication clause. Am I correct in assuming if the contract has been novated then the adjudicator has jurisdiction to handle the adjudication against Company B? I have been into adjudication before with company A, but if I entered into the adjudication against Company B - would it be considered the same adjudication (same contract, but different companies and claims)? Thanks Frances
Expert:  JimLawyer replied 12 days ago.

Hi there, I am not familiar with JCT clauses however other experts on this site are - so I will need to opt out of this question to let them answer this for you.

Thanks

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Expert:  Nicola-mod replied 7 days ago.
Hello,

I apologise as we have not yet been able to find a Professional to assist you. Do you wish for me to continue to search for someone to assist you or would you like for us to close your question at this time?

Thank you for your patience,
Nicola
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Expert:  UK Solicitor John replied 6 days ago.

Hello.

 

I believe you are correct based on the principle in Hillcrest Homes Limited v Beresford and Curbishley Limited 2014. You can view the summary here

http://www.adjudication.co.uk/archive/view/case/1613/term/search+our+site/hillcrest_homes_ltd_v_beresford_and_curbishley_ltd_%5B2014%5D_ewhc_280_(tcc)

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Customer: replied 6 days ago.
Thanks very much John. I will have a read through the case. Thanks Frances
Expert:  UK Solicitor John replied 6 days ago.

You're welcome, please let me know if you find it useful and if it is helpful, if so please take a moment to provide a rating. Kind regards, John

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