Deed of Novation (New Zealand)
DEED OF NOVATION
This Deed of Novation (the "Deed") is executed on [Deed Date] in accordance with the laws of New Zealand.
PARTIES
1. [Outgoing Party Name] of [Outgoing Party Address] (the "Outgoing Party").
2. [Incoming Party Name] of [Incoming Party Address] (the "Incoming Party").
3. [Continuing Party Name] of [Continuing Party Address] (the "Continuing Party").
The Outgoing Party, Incoming Party, and Continuing Party are referred to collectively as the "Parties" and individually as a "Party".
BACKGROUND
A. On [Original Agreement Date], the Outgoing Party (in its capacity as [Outgoing Party Role]) and the Continuing Party (in its capacity as [Continuing Party Role]) entered into an agreement described as: [Original Agreement Name] [Original Agreement Description] (the "Original Agreement").
B. The Parties have agreed that, with effect from the Effective Date, the Incoming Party will be substituted for the Outgoing Party under the Original Agreement, and the Outgoing Party will be released from all of its obligations under the Original Agreement that are transferred to the Incoming Party pursuant to this Deed.
C. The Parties intend this document to take effect as a deed under New Zealand law and to be governed by the Contract and Commercial Law Act 2017 (CCLA).
OPERATIVE PROVISIONS
4. NOVATION
4.1 Effective Date: This novation takes effect on [Effective Date] (the "Effective Date").
4.2 Transfer: With effect from the Effective Date, the Incoming Party assumes [Novation Scope] and is substituted for the Outgoing Party in all respects as if the Incoming Party had been named as the [Incoming Party Role] in the Original Agreement from its inception.
4.3 Incoming Party Obligations: The Incoming Party agrees to be bound by, and to perform, [Novation Scope] under the Original Agreement as if it were named as the [Incoming Party Role] in the Original Agreement. The Incoming Party will be entitled to exercise all rights of the Outgoing Party under the Original Agreement that are transferred pursuant to this Deed.
4.4 Continuing Party Consent: The Continuing Party consents to the novation effected by this Deed and agrees that, from the Effective Date, it will look solely to the Incoming Party (and not the Outgoing Party) for the performance of the [Outgoing Party Role]'s obligations under the Original Agreement that are transferred pursuant to this Deed.
5. RELEASE OF OUTGOING PARTY
5.1 The Continuing Party releases and discharges the Outgoing Party from [Novation Scope] under the Original Agreement that arise on or after the Effective Date.
5.2 The release in clause 2.1 does not release the Outgoing Party from any obligation, liability, or right that arose prior to the Effective Date under the Original Agreement. The Outgoing Party remains liable to the Continuing Party for any breach or default that occurred before the Effective Date, and the Continuing Party retains all accrued rights and remedies in respect of such pre-Effective Date matters.
5.3 The Outgoing Party agrees to release the Continuing Party from any obligation to the Outgoing Party arising under the Original Agreement on or after the Effective Date, recognising that such obligations are assumed by the Incoming Party from the Effective Date.
6. ORIGINAL AGREEMENT TO CONTINUE
6.1 Except as modified by this Deed, the terms and conditions of the Original Agreement remain in full force and effect as between the Incoming Party (in place of the Outgoing Party) and the Continuing Party from the Effective Date.
6.2 Where the Original Agreement refers to the [Outgoing Party Role], that reference will be read, from the Effective Date, as a reference to the Incoming Party.
6.3 This Deed does not create any new right or obligation beyond those that existed under the Original Agreement (as novated by this Deed).
7. FURTHER ASSURANCES
7.1 Each Party must, at its own cost, do all things and execute all documents reasonably necessary to give full effect to this Deed and the novation it effects, including notifying any third parties whose consent may be required under the Original Agreement.
7.2 The Outgoing Party must, within 10 business days of the Effective Date, deliver to the Incoming Party all documents, records, correspondence, and other materials in its possession relating to the Original Agreement.
8. GENERAL
8.1 Governing Law: This Deed is governed by the laws of New Zealand, including the Contract and Commercial Law Act 2017 (CCLA). Each Party submits to the exclusive jurisdiction of the courts of New Zealand for the resolution of any dispute arising out of or in connection with this Deed.
8.2 Entire Agreement: This Deed constitutes the entire agreement between the Parties with respect to the novation of the Original Agreement and supersedes all prior agreements, representations, and negotiations regarding the same subject matter.
8.3 Counterparts: This Deed may be executed in counterparts, each of which constitutes an original, and all counterparts together constitute one document. Counterparts may be exchanged by email or electronic means.
8.4 Severability: If any provision of this Deed is found by a court of competent jurisdiction to be invalid or unenforceable, that provision will be severed from the Deed and the remaining provisions will continue in full force and effect.
8.5 Deed Form: The Parties intend this document to take effect as a deed under New Zealand law. Each Party acknowledges that this Deed is binding on it as a deed from the date of its delivery, even without the exchange of consideration.
8.6 Dispute Resolution: In the event of a dispute arising under or in connection with this Deed, the Parties will attempt to resolve the dispute in good faith. If unresolved within 20 business days of written notice, either Party may refer the matter to the courts of New Zealand having jurisdiction over the matter.
8.7 Privacy: Each Party must handle any personal information obtained in connection with this Deed in accordance with the Privacy Act 2020 (NZ) and the applicable Information Privacy Principles.
EXECUTION
EXECUTED as a deed by the Parties in accordance with the laws of New Zealand:
OUTGOING PARTY
[Outgoing Party Name]
Address: [Outgoing Party Address]
INCOMING PARTY
[Incoming Party Name]
Address: [Incoming Party Address]
CONTINUING PARTY
[Continuing Party Name]
Address: [Continuing Party Address]
Outgoing Party
________________
Signature
Incoming Party
________________
Signature
Continuing Party
________________
Signature
What Is a Deed of Novation (New Zealand)?
A Deed of Novation in New Zealand records the of novation arrangement agreed between the parties and the specific obligations each side accepts, forming a binding agreement under the Contract and Commercial Law Act 2017.
In New Zealand, a novation is most effectively documented as a deed — a formal written instrument that is binding without the need for consideration. This is important because the consideration for the novation may not be obvious or present in all three directions required for a binding simple contract. By executing the novation as a deed under New Zealand law, the Parties are bound by its terms by virtue of the form of the document.
The Contract and Commercial Law Act 2017 (CCLA) is the primary statute governing commercial contracts in New Zealand. The CCLA consolidated and modernised 11 previously separate commercial statutes into a single thorough Act, covering contractual remedies, misrepresentation, privity, the assignment of contractual rights, electronic transactions, and the sale of goods. The CCLA replaced the Contractual Remedies Act 1979, the Contractual Mistakes Act 1977, the Illegal Contracts Act 1970, and other foundational statutes.
A novation under New Zealand law requires the consent of all three parties: the outgoing party (who is being released from the contract), the incoming party (who is taking over the obligations), and the continuing party (who must agree to look to the incoming party rather than the outgoing party for performance). Without the consent of the continuing party, the outgoing party cannot be released from its obligations — the continuing party's consent is what distinguishes novation from mere assignment.
The Property Law Act 2007 (PLA) also governs certain aspects of deeds and the transfer of property rights in New Zealand. Where a novation involves leasehold interests or registered property rights, the relevant provisions of the PLA must be observed. For company parties, the Companies Act 1993 governs corporate authority to execute deeds and the authority of directors and officers to bind the company.
When Do You Need a Deed of Novation (New Zealand)?
A Deed of Novation is required whenever a party to an existing contract in New Zealand wishes to transfer both its rights and its obligations under that contract to a third party, with the effect that the outgoing party is released from future performance obligations.
The most common commercial situations requiring a Deed of Novation in New Zealand include business sales as going concerns, where the seller must transfer all ongoing contracts — including customer contracts, supplier agreements, employment arrangements, and leases — to the buyer. A novation is required rather than a mere assignment because the buyer needs to take on the seller's obligations, not just its rights.
Corporate restructures involving the transfer of a business unit or division from one group entity to another require all contracts of the transferring business to be novated to the transferee entity. This is common in mergers and acquisitions involving New Zealand companies under the Companies Act 1993.
Outsourcing transitions are another common occasion for a Deed of Novation. Where a client wishes to change service providers and has an ongoing contract with the incumbent provider, a novation enables the new provider to step into the incumbent's contractual position with the consent of the client.
Commercial lease assignments involving a change of landlord entity — for example, where the property is transferred to a related entity or sold to a new owner who wishes to maintain the existing tenancy on unchanged terms — typically require a deed of novation or a deed of assignment with accompanying consent from the existing tenant.
In contrast to assignment, a Deed of Novation should be used whenever it is important to achieve a clean break for the outgoing party — where the outgoing party must be released from all future obligations, and the continuing party must agree to look only to the incoming party for future performance.
What to Include in Your Deed of Novation (New Zealand)
A well-drafted New Zealand Deed of Novation must address several key elements to achieve its intended legal effect and protect all three parties.
The identification of parties is fundamental. The deed must precisely identify the outgoing party (the party being replaced), the incoming party (the party being substituted in), and the continuing party (the party who remains in the contract and whose consent gives the novation its legal effect). For New Zealand companies, the full registered name (ending in 'Limited' or 'Ltd') and the NZBN (New Zealand Business Number) should be included.
The description of the original agreement must be sufficiently specific to identify the contract being novated without ambiguity. This includes the full title of the agreement, the date it was entered into, and a brief description of its subject matter.
The effective date clause specifies when the novation takes effect. The effective date may be the same as the date on which the deed is executed, or it may be a future date. Where the effective date is retrospective, all three parties must agree that the novation applies retrospectively.
The novation clause sets out the core transfer of rights and obligations from the outgoing party to the incoming party. It should be clear whether the novation covers only obligations arising from the effective date (a partial novation) or all obligations under the original agreement (a full novation).
The release clause releases the outgoing party from its obligations under the original agreement from the effective date. The scope of the release — particularly whether it extends to pre-novation liabilities — is a critical commercial negotiation point under New Zealand law.
The representations and warranties clause (if included) confirms the outgoing party confirms the current status of the original agreement — that it is in full force and effect, there are no undisclosed breaches, and all amounts owing have been paid. This protects the incoming party from inheriting a contract already in dispute.
Governing law: The deed should expressly state that it is governed by the laws of New Zealand, including the Contract and Commercial Law Act 2017, and that disputes will be resolved in the courts of New Zealand. Privacy obligations under the Privacy Act 2020 should also be addressed where personal information is transferred as part of the novation. The forms-legal.com Deed of Novation (New Zealand) provides a ready-to-use template that meets New Zealand legal requirements.
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Deed of Novation (New Zealand) (New Zealand) [Legal document template]. Forms Legal. https://forms-legal.com/new-zealand/business/contracts/deed-of-novation-new-zealand
"Deed of Novation (New Zealand) (New Zealand)." Forms Legal, 2026, https://forms-legal.com/new-zealand/business/contracts/deed-of-novation-new-zealand.
@misc{formslegal-deed-of-novation-new-zealand,
author = {{Forms Legal}},
title = {Deed of Novation (New Zealand) (New Zealand)},
year = {2026},
howpublished = {\url{https://forms-legal.com/new-zealand/business/contracts/deed-of-novation-new-zealand}},
note = {Free legal document template. Based on Contract and Commercial Law Act 2017}
}
Frequently Asked Questions
Novation and assignment are two distinct legal mechanisms for transferring contractual rights and obligations under New Zealand law, as codified in the Contract and Commercial Law Act 2017 (CCLA). An assignment transfers only the rights of a party — the assignor's obligations remain with the original party. By contrast, a novation replaces one party to a contract with a new party entirely, transferring both the rights and the obligations of the outgoing party to the incoming party, and releasing the outgoing party from all future liability. Novation requires the consent of all three parties: the outgoing party, the incoming party, and the continuing party. Without the consent of the continuing party, the outgoing party cannot be released from its obligations. The CCLA governs assignments of contractual rights and the enforceability of novation agreements in New Zealand.
A Deed of Novation is executed as a deed rather than a simple contract because a deed does not require consideration to be legally binding under New Zealand law. In a typical novation, the outgoing party receives a release from its obligations, the incoming party assumes those obligations, and the continuing party gives up its rights against the outgoing party — but there may be no conventional consideration (payment or promise) flowing in all directions required for a binding simple contract. A deed is binding by virtue of its form alone, without the need for consideration, provided it is properly executed. This makes the deed format the appropriate vehicle for novation in New Zealand. Deeds are recognised under the Property Law Act 2007 and general common law principles applicable in New Zealand.
Yes. Under New Zealand law, a Deed of Novation releases the outgoing party only from obligations and liabilities that arise on and after the effective date of the novation. Obligations, rights, and liabilities that accrued before the effective date — such as unpaid invoices, pre-existing breaches, or claims arising from work performed before the novation — remain with the outgoing party unless the parties expressly agree otherwise in the deed. The continuing party retains the right to pursue the outgoing party for any pre-novation breach or default. If the parties wish to release the outgoing party from pre-novation liabilities as well, this must be expressly stated in the Deed. This allocation of liability is governed by the general contractual principles set out in the Contract and Commercial Law Act 2017.
Deeds of Novation are commonly used in New Zealand in the following circumstances: business sales and acquisitions where the seller's contracts with customers, suppliers, or landlords need to transfer to the buyer under the Companies Act 1993; corporate restructures where contracts need to move between entities within the same group; outsourcing transitions where delivery of services under an existing contract is taken over by a new service provider; commercial lease assignments involving a change of landlord entity under the Property Law Act 2007; software licence or maintenance agreement transfers when a software company is acquired; and franchise agreements when a franchisee sells their business to a new operator. In all these situations, the consent of the continuing party to the novation — documented in a deed — is essential to achieve a clean transfer of the contractual relationship.
All parties to a Deed of Novation must comply with the Privacy Act 2020 (NZ) when handling personal information obtained in connection with the novation. The Privacy Act 2020 replaced the Privacy Act 1993 and introduced 13 Information Privacy Principles (IPPs) governing the collection, use, disclosure, storage, and security of personal information. The Act also introduced mandatory privacy breach reporting — agencies must notify the Privacy Commissioner and affected individuals of a privacy breach that has caused or is likely to cause serious harm. Where a novation involves the transfer of customer records, employee data, or other personal information from the outgoing party to the incoming party, the deed should address how that information will be handled and should require the incoming party to comply with the IPPs.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
Found an error? Let us knowRelated Documents
You may also find these documents useful:
Deed of Variation (New Zealand)
Create a New Zealand Deed of Variation to formally amend the terms of an existing contract. Governed by the Contract and Commercial Law Act 2017 (CCLA). Executed as a deed — no consideration required. Covers specific clause variations, GST treatment under the Goods and Services Tax Act 1985, acknowledgment of prior variations, continuance of the original agreement on amended terms, and general provisions including governing law under New Zealand courts and compliance with the Fair Trading Act 1986.
Service Agreement (New Zealand)
Create a comprehensive New Zealand Service Agreement compliant with the Contract and Commercial Law Act 2017 (CCLA), Consumer Guarantees Act 1993 (CGA), and the Fair Trading Act 1986 (FTA). Covers scope of services, GST-inclusive or exclusive fees at 15%, payment terms, CGA consumer guarantees, intellectual property ownership under the Copyright Act 1994, confidentiality, Privacy Act 2020 obligations, limitation of liability, and termination rights. Suitable for consultants, freelancers, agencies, and businesses providing services across New Zealand.
Deed of Release (New Zealand)
Create a legally enforceable New Zealand Deed of Release compliant with the Contract and Commercial Law Act 2017 (CCLA) and the Property Law Act 2007 (PLA). This deed provides a general release of claims between parties, with consideration, ACC entitlement preservation under the Accident Compensation Act 2001, no-admission clause, optional confidentiality, and representations and warranties. Suitable for settling commercial disputes, terminating contractual relationships, and resolving liability claims under New Zealand law.
Business Sale Agreement (New Zealand)
Create a comprehensive Business Sale Agreement for New Zealand, governed by the Contract and Commercial Law Act 2017 (CCLA), the Goods and Services Tax Act 1985, the Employment Relations Act 2000, the Property Law Act 2007, and the Fair Trading Act 1986. Covers purchase price and GST treatment (zero-rated going concern under section 11(1)(m) GST Act 1985), purchase price allocation, stock valuation, conditions precedent (due diligence, landlord consent, liquor licence transfer under Sale and Supply of Alcohol Act 2012), employee transfer obligations under section 69I ERA 2000, Holidays Act 2003 entitlements, restraint of trade, vendor training and handover, comprehensive vendor warranties, and governing law. Download as PDF or Word.