Note on switch and ab initio novations

There are in the construction industry at present two types of novation for the situation where a consultant is to be novated from a client to a design and build contractor. These are the ‘switch’ and the ab initio forms.

In order to explain the differences between them, it is necessary to start with some basic principles about novation.

Novation describes the process by which the two parties to a contract deal with the rights and obligations under that contract. In a consultant’s contract, the rights of either party are basically the rights to sue the other. These rights can be assigned to third parties without consent unless the contract provides otherwise. This is referred to simply as ‘assignment’ and happens all the time.