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Novation Agreement (Construction)
"I need a Novation Agreement (Construction) to transfer our existing mall construction project in Riyadh from ABC Contractors to XYZ Building Co., ensuring all warranties for completed work are maintained and subcontractor relationships are preserved."
1. Parties: Identification of the Original Contractor (Transferor), the New Contractor (Transferee), and the Employer/Client
2. Background: Details of the original construction contract, reason for novation, and current status of the works
3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including references to Sharia Law principles
4. Novation: Core provisions effecting the transfer of rights and obligations from Original Contractor to New Contractor
5. Effective Date: Specification of when the novation takes effect and any conditions precedent
6. Release and Assumption of Obligations: Release of Original Contractor and assumption of obligations by New Contractor
7. Outstanding Payments: Treatment of payments due, retentions, and security bonds
8. Warranties and Representations: Warranties regarding works completed, capacity to contract, and compliance with Saudi law
9. Construction Documents: Transfer of project documentation, permits, and certificates
10. Liability Provisions: Allocation of liabilities for pre and post-novation works
11. Insurance: Requirements for maintaining and transferring insurance coverage
12. Governing Law and Jurisdiction: Confirmation of Saudi law governance and dispute resolution mechanisms
1. Step-in Rights: Optional provisions for Employer's step-in rights, used in high-value or critical infrastructure projects
2. Third Party Consents: Section addressing necessary third-party approvals, used when subcontractors or other stakeholders' consent is required
3. Performance Security: Provisions for new performance bonds or guarantees, included when required by project value or complexity
4. Intellectual Property: Transfer of IP rights, included when design or technical solutions are part of the contracted works
5. Confidentiality: Provisions for maintaining confidentiality, used in sensitive or high-value projects
6. Government Approvals: Section addressing required governmental approvals, included when project involves public sector or regulated activities
1. Schedule 1 - Original Contract: Copy or details of the original construction contract being novated
2. Schedule 2 - Project Status Report: Detailed report on the current status of construction works
3. Schedule 3 - Outstanding Works: List and description of remaining works to be completed
4. Schedule 4 - Payment Schedule: Details of outstanding payments, retention amounts, and payment terms
5. Schedule 5 - Transferred Documentation: List of all project documents, permits, and certificates being transferred
6. Schedule 6 - Warranties and Guarantees: List of existing warranties and guarantees being transferred
7. Schedule 7 - Construction Program: Updated construction program showing remaining works and timelines
8. Schedule 8 - Subcontracts: List of existing subcontracts and their status
Authors
Construction
Infrastructure
Real Estate Development
Energy
Industrial Development
Healthcare Construction
Education Construction
Commercial Development
Residential Development
Government Infrastructure
Transportation
Mining
Oil & Gas
Legal
Construction
Commercial
Procurement
Project Management
Risk & Compliance
Operations
Finance
Technical Services
Quality Assurance
Construction Manager
Project Director
Legal Counsel
Contract Manager
Commercial Manager
Project Manager
Chief Legal Officer
Construction Director
Procurement Manager
Risk Manager
Quality Assurance Manager
Technical Director
Operations Manager
Chief Executive Officer
Finance Director
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