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Faced with the scenario of transfer of rights and/or contractual obligations, it is important to understand exactly what is being transferred. For this reason, it is important that you fully understand the entire complex language of a contract. Consulting a lawyer is one way to make sure you know what you`re agreeing to before signing a legally binding document. Securities transactions such as acquisitions and mergers involve a large number of novation contracts and are a common method of loan rescheduling. Another classic example is when Company A enters into a contract with Company B and a novation is included to ensure that if Company B sells, merges or transfers the core of its business to another company, the new company assumes the obligations and responsibilities that Company B has with Company A under the contract. Thus, with respect to the Contract, a buyer, party to the merger or acquirer of Company B is following in the footsteps of Company B with respect to its obligations to Company A. Alternatively, in the event of such a change under the Original Agreement,[5] a “Novation Agreement” may be signed. This is common in contracts with government agencies; An example under the U.S. Anti-Assignment Act is that the government entity that originally issued the contract must agree to such a transfer, otherwise it is automatically invalid by law. .