Deeds of Variation, Novation and Assignment
Changing the terms of an existing agreement, or passing it to someone else, in a document that leaves no doubt about what changed and from when.
- Deeds of variation for commercial agreements
- Novations transferring rights and obligations to a new party
- Assignments of rights, with notice to the other party
- Prepared from the terms the parties have agreed
Changing an existing agreement
Variation, Novation or Assignment?
These 3 documents do different jobs. A variation changes the terms between the same parties. A novation replaces 1 party with a new party. An assignment transfers 1 party's rights, but not its obligations, to someone else.
A deed of variation is used when the parties want to keep their agreement but change part of it: the price, the term, the scope, a party's name or a particular clause. The deed records exactly which clauses change, the new wording and the date the change takes effect.
A deed of novation is used when a party is stepping out altogether, for example when a business is sold or a contract moves to a related company. The new party takes on the rights and obligations, and the outgoing party is released. All parties, including the one staying in, must agree.
A deed of assignment transfers the benefit of an agreement, such as the right to receive payment, without transferring the burden. The original party remains liable for its obligations unless the other side agrees to release it. Whether an assignment needs consent depends on the original agreement.
These changes are usually made by deed because a deed does not need fresh consideration to be binding, and in NSW the time to bring a claim on a deed is 12 years rather than 6.
What it covers
What We Prepare
Each deed is prepared from the original agreement and the change the parties have agreed.
Deed of Variation
Amendments to identified clauses of an existing agreement, with the rest of the agreement confirmed as unchanged.
Deed of Novation
A new party stepping into the agreement in place of an outgoing party, with the outgoing party released.
Deed of Assignment
A transfer of a party's rights under an agreement, with notice given to the other party.
Consents
Consent of the other party, a guarantor or a financier where the original agreement or the law requires it.
Releases
Releases of the outgoing party from future obligations, and any agreed treatment of past liabilities.
Effective Date
The date the change takes effect, and how amounts due before and after that date are dealt with.
Fixed fees for this work are published on our pricing page.
Get a Fixed-Fee QuoteHow it works
How It Works
Send us the original agreement
Together with any earlier variations and a note of what has been agreed.
We confirm the fee
You receive a fixed fee in writing before any work starts.
We prepare the deed
The deed is prepared to fit the original agreement and the change agreed.
Signing as a deed
We explain how each party signs so the deed is properly executed, then confirm what each party should keep.
Before you start
What to Have Ready
A deed of this kind is only as good as its connection to the original agreement, so that document comes first.
The original agreement: The signed agreement and any variations, side letters or emails that changed it.
The change: The clauses affected and the new terms, or the details of the incoming party.
The parties: Full names and ACNs of each party, including any guarantor and the new party.
Timing: When the change is to take effect and whether anything before that date needs to be dealt with.
Common Mistakes
Changing terms by email: An email exchange may not meet the agreement's own requirements for a variation, leaving it unclear what was agreed.
Assigning when you meant to novate: An assignment leaves the original party liable. If the aim is to step out completely, a novation is usually needed.
Ignoring the original agreement: Many agreements say how they may be varied and whether consent is needed to assign. Those requirements must be followed.
Not signing as a deed: A deed has execution formalities. If they are not met, the document may not have the effect intended.
Points Worth Knowing
Guarantors
Varying a guaranteed agreement without the guarantor's agreement can release the guarantor. Include them as a party.
Security registrations
If the agreement is secured, a PPSR registration may need to be updated when it is assigned or novated.
Leases are different
Variations and assignments of leases follow their own process and may need registration.
Trust deeds
Varying a trust deed depends on the power of amendment in that deed and raises separate duty questions.
Business sales
On a business sale, key contracts are often novated or assigned as part of completion.
Keep a clean copy
After several variations, a consolidated copy of the agreement avoids confusion later.
We prepare deeds of variation, novation and assignment where the change is agreed. We do not act in disputes about the original agreement.
Talk to Us About Your MatterLeases, trusts and business sales each have their own way of handling variations and transfers.
Deed of Variation FAQs
What is a deed of variation?
What is the difference between novation and assignment?
Why use a deed rather than a letter or email?
Does the other party have to agree?
Can a variation be backdated?
What does a deed of variation cost?
Do you handle lease variations?
Have a question that is not answered here?
Contact UsNeed to Change an Existing Agreement?
Send us the agreement and tell us what has been agreed, and we will confirm a fixed fee before any work starts.
Get a Fixed-Fee Quote