Another classic example is that Company A enters into a contract with Company B and an innovation is included to ensure that when Company B sells, merges or transfers the core of its business to another entity, the new entity will assume The obligations and commitments of Company B with Company A under the contract. Therefore, under the contract, an acquirer, merger partner or acquirer of Company B follows in the footsteps of Company B with respect to its obligations to Company A. Alternatively, in the event of such an amendment, an “innovation agreement” may be signed under the original contract. This is a common practice in government contracts; An example of the United States Anti-Assignment Act, the state agency that originally issued the contract must accept such a transfer, or it is automatically struck down by law. Novation contracts become useful when the transfer of contractual rights and obligations is legally and contractually limited. Many contracts are coming for corporate transactions such as mergers and acquisitions. Innovation is beneficial for situations in which payments or benefits can no longer be executed under the terms of the original contract. Innovation helps restructure the debt to avoid default or bankruptcy of the debtor. An example of innovation that replaces the commitment of a contract: Anna and Jose decide to pay the debts with a work of art, both of which they accept that they are worth $100 and not in cash. This innovation replaces the initial obligation to pay $100 in cash with a new obligation to pay with the artwork.

For example, if there is a contract in which Dan Einen will give the TV to Alex and another contract in which Alex Becky will give a television, then it is possible to renew both contracts and replace them with a single contract where Dan agrees to give Becky a television. Unlike the assignment, the Novation must be approved by all parties. The new contract has yet to be considered, but it is generally assumed that the previous contract will be executed.