What is novation in SAP SRM-EBP-CON - Contract Management?

SAP Term: novation

• Component: SRM-EBP-CON

• Component Name: Contract Management

• Description: The transfer of some or all contracts and purchase orders from one vendor to another due to merger or buy-out.

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• Key Concepts: 
  Novation is a process in SAP SRM-EBP-CON Contract Management that allows for the transfer of contractual rights and obligations from one party to another. It is used when a contract needs to be transferred from one party to another, such as when a company is acquired or when a supplier changes. 
  
  How to use it: 
  In SAP SRM-EBP-CON Contract Management, novation can be initiated by the contract owner. The contract owner must first select the contract that needs to be novated and then enter the details of the new party that will take over the contract. Once this is done, the contract owner must approve the novation and then it will be completed. 
  
  Tips & Tricks: 
  When novating a contract, it is important to ensure that all parties involved are aware of the process and agree to it. Additionally, it is important to make sure that all relevant documents are updated with the new party’s information. 
  
  Related Information: 
  Novation is similar to assignment, which is another process in SAP SRM-EBP-CON Contract Management that allows for the transfer of contractual rights and obligations from one party to another. However, assignment does not require approval from all parties involved, whereas novation does.