We are all well aware by now that construction contracts entered into on or after 1 October 2011 are subject to the Housing Grants Construction and Regeneration Act 1996 amended by the Local Democracy Economic Development and Construction Act 2009. Contracts entered into before that date should comply with the old regime.
The effect of a traditional ab initio novation agreement is to end the previous contract (between consultant and old employer) and create a new one (between consultant and new employer).
Therefore where an appointment (entered into before 1 October 2011 and subject to the old rules) is novated on or after 1 October 2011 the novated contract will be subject to the new rules (regarding payment, suspension and adjudication).
It is a good idea for the consultant and the new employer to acknowledge this and incorporate in the novation agreement any changes the parties wish to make to the contract in consequence.
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