I’m not even sure if this is a NEC question or a more general legal contractual question.
NEC 3 Contract
The Employer is a government body (a quango in effect) that is being wound up whilst it has a number of NEC contracts running
The Contracts are to be transferred to another government body (a newly formed department taking responsibility for the work of a number of quangos - a super quango if you will)
For me the process of transferring the contracts over is an assignment of the contract to the new body whereby the old body confirms it is relinquishing any rights (benefits) and responsibilities under the contract. The new body confirms it is now assuming all of the rights and responsibilities of the of the old Employer, and the Contractor acknowledges that it will fulfil its obligations (liabilities) to deliver the works to the new Employer. In effect a triparty agreement to the change
For me that represents an assignment rather than a novation… Am I correct?
does the Contractor have any right to refuse to agree to the assignment within the NEC contract?
Are there any particular clauses that facilitate this kind of change? I can’t find anything that specifically addresses this situation. Am I missing something?
Any help, opinions or advice would be greatly appreciated
@ken.mazey there is nothing in the contract that deals with novation or assignment however clause 12.3 provides for the Parties to agree to a change in Employer which would then need to be formalised usually by way of a deed of variation or similar. This cannot be forced on you as Contractor, it has to be done by agreement. It isn’t unusual to see novation / assignment rights being included in NEC contracts as Z clauses so it would be worth checking to see if any exist in your contract and if so what rights they give you and the Employer.
Ken, I fully agree with Neil.
Since both rights and responsibilities are transferred, it seems to be a novation, essentially an agreement with a new party. What you need to be careful of (in the Deed of Novation I suppose) is that you retain all accrued rights to the date specified in the deed.