# Can a Novation Agreement Be Drafted to Selectively Transfer Only Certain Liabilities to the New Party? ▴ Question

**Published:** 2025-08-04
**Categories:** Question

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## Concept

A [novation agreement](https://prime.greeks.live/area/novation-agreement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) can indeed be drafted to selectively transfer only certain liabilities to a new party. The architecture of such an agreement hinges on the foundational principle of novation itself ▴ it is a tripartite consensus. The outgoing party, the incoming party, and the [continuing party](https://prime.greeks.live/question/what-is-the-process-for-a-multi-party-rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) must all consent to the terms. This requirement for unanimous agreement is the mechanism that allows for the precise calibration of the transfer.

The novation operates by extinguishing an [original contract](https://prime.greeks.live/question/from-a-legal-perspective-how-does-novation-alter-the-fundamental-rights-of-the-original-counterparties/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and creating a new one that mirrors the old terms, with the critical exception of the substituted party. Within this process of substitution, the parties possess the authority to define the exact scope of the obligations and liabilities the new party will assume. This is a matter of contractual freedom and negotiation.

The process is distinct from an assignment. An assignment typically transfers only the rights and benefits of a contract, leaving the original party (the assignor) responsible for the obligations and liabilities. Novation, conversely, is designed to transfer the complete set of contractual duties. However, “complete” in this context is defined by the terms of the novation agreement itself.

The parties can agree to a partial transfer, effectively splitting the liabilities between the outgoing and incoming entities. For example, liabilities arising before a specific date might remain with the [outgoing party](https://prime.greeks.live/question/what-is-the-process-for-a-multi-party-rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), while all future liabilities are assumed by the incoming one. This granular control is essential in complex business transactions like mergers, acquisitions, or corporate restructurings where carving out legacy liabilities is a primary objective.

> A novation agreement’s power lies in its requirement for mutual consent, which enables the parties to precisely define the scope of transferred liabilities.

The legal effect is the creation of a new contractual reality. The original contract is rescinded, and a new one is formed between the continuing party and the [incoming party](https://prime.greeks.live/question/what-is-the-process-for-a-multi-party-rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). The outgoing party is released from the specific obligations and liabilities that have been transferred, providing them with a clean break from those defined responsibilities.

The enforceability of this [selective transfer](https://prime.greeks.live/question/how-can-a-fair-transfer-price-be-modeled-when-market-transactions-are-scarce/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) rests entirely on the clarity and precision of the drafting within the novation agreement. Ambiguity creates risk, so the agreement must explicitly delineate which liabilities are transferred and which are retained to prevent future disputes.

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## Strategy

Employing a [selective novation](https://prime.greeks.live/area/selective-novation/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is a strategic [risk allocation](https://prime.greeks.live/area/risk-allocation/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) mechanism. The decision to partition liabilities is driven by specific commercial objectives, most often seen in the context of corporate transactions or the strategic realignment of service contracts. A buyer in an acquisition, for instance, may be willing to take on future performance obligations but will refuse to inherit pre-existing legal disputes or financial debts associated with the contract. A selective novation provides the surgical tool to effect this separation, allowing the deal to proceed while isolating historical risk with the original party.

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## Frameworks for Liability Allocation

The strategic approach to drafting a selective novation involves identifying and categorizing liabilities to align with the parties’ risk appetites and commercial goals. This requires a thorough [due diligence](https://prime.greeks.live/area/due-diligence/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) process to understand the full spectrum of [potential liabilities](https://prime.greeks.live/question/what-are-the-direct-liabilities-for-senior-managers-who-fail-to-prevent-counterparty-misconduct/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) under the original contract. Once identified, these liabilities can be allocated according to several frameworks.

- **Temporal Allocation** ▴ This is the most common framework. Liabilities are divided based on a specific cut-off date, usually the effective date of the novation. The outgoing party remains responsible for all liabilities that accrued prior to this date, and the [incoming party assumes](https://prime.greeks.live/question/what-are-the-primary-risks-a-dealer-assumes-when-pricing-a-collar-in-a-high-volatility-market/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) all liabilities arising from performance thereafter.

- **Functional Allocation** ▴ In multi-faceted service contracts, liabilities may be split based on specific service lines or project components. For example, if a large IT contract is being partially transferred, the [incoming party might](https://prime.greeks.live/question/in-what-scenarios-might-a-non-defaulting-party-strategically-prefer-the-standard-close-out-process-over-aet/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) only assume liabilities related to software maintenance, while the [outgoing party retains](https://prime.greeks.live/question/what-is-the-process-for-a-multi-party-rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) liabilities associated with the initial system development.

- **Risk-Based Allocation** ▴ Parties may agree to allocate specific types of risk. An incoming party might agree to take on operational liabilities but refuse to accept [liabilities related](https://prime.greeks.live/question/what-are-the-direct-liabilities-for-senior-managers-who-fail-to-prevent-counterparty-misconduct/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) to [intellectual property infringement](https://prime.greeks.live/question/how-does-the-use-of-explainable-ai-impact-the-intellectual-property-of-proprietary-trading-models/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) or environmental compliance that originated with the outgoing party’s prior actions.

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## Negotiating the Selective Transfer

The negotiation is a complex, three-way process. The continuing party’s consent is the critical fulcrum. They are being asked to accept a new counterparty, potentially with a different risk profile, and to agree to a complex liability structure. Their primary concern is ensuring the contract’s performance and continuity.

To secure their consent, the outgoing and incoming parties must present a clear and compelling case. Key factors influencing the continuing party’s decision include the financial standing of the incoming party, the clarity of the proposed liability split, and the inclusion of robust indemnity clauses.

> A selective novation transforms a standard contract transfer into a precise risk management instrument, aligning liability with strategic intent.

The table below compares a standard, all-encompassing novation with a selective, partial novation, highlighting the key strategic differences.

### Table 1 ▴ Standard Novation vs. Selective Novation

| Attribute | Standard Novation | Selective Novation |
| --- | --- | --- |
| Scope of Transfer | Transfers all rights, obligations, and liabilities. | Transfers all rights but only specifically defined obligations and liabilities. |
| Risk Allocation | The incoming party assumes all historical and future risks. The outgoing party achieves a complete release. | Risk is partitioned. The outgoing party retains specified liabilities (e.g. historical), and the incoming party assumes others (e.g. future). |
| Drafting Complexity | Relatively straightforward. Standard form agreements are often sufficient. | Highly complex. Requires bespoke drafting to precisely define “Transferred Liabilities” and “Retained Liabilities.” |
| Due Diligence Required | Standard due diligence on the incoming party’s ability to perform. | Extensive due diligence to identify, categorize, and quantify all potential liabilities being partitioned. |
| Primary Use Case | Complete business succession or straightforward contract transfers. | Mergers & acquisitions, corporate carve-outs, and restructuring of complex service agreements. |

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## Execution

The execution of a [selective novation agreement](https://prime.greeks.live/question/what-are-the-primary-legal-differences-between-a-bilateral-agreement-and-ccp-novation/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is an exercise in precision. The objective is to create a legally binding document that leaves no ambiguity regarding the allocation of liabilities. This requires a systematic process involving legal, financial, and operational stakeholders from all three parties. The integrity of the execution rests upon the clarity of the language used to define the scope of the transfer.

![A digitally rendered, split toroidal structure reveals intricate internal circuitry and swirling data flows, representing the intelligence layer of a Prime RFQ. This visualizes dynamic RFQ protocols, algorithmic execution, and real-time market microstructure analysis for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-core-processing-architecture-visualized-through-interconnected-liquidity-networks.jpg)

## A Procedural Guide to Drafting

Executing a selective novation follows a structured path from initial analysis to final documentation.

- **Liability Audit and Categorization** ▴ The first step is a comprehensive audit of the original contract. This involves identifying all express and implied obligations, as well as any existing, contingent, or potential liabilities. These should be categorized (e.g. by time, function, or risk type) to form the basis of negotiation.

- **Tripartite Negotiation and Agreement** ▴ All three parties must reach a consensus on the precise allocation of the identified liabilities. This negotiation phase is critical. The outcome must be a clear commercial understanding of who is responsible for what, both before and after the novation effective date.

- **Drafting the Novation Deed** ▴ The commercial agreement is then translated into a formal legal document, typically a deed to ensure validity without raising questions of consideration. The drafting must be meticulous.

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## What Are the Critical Clauses in the Agreement?

The effectiveness of the selective transfer is determined by specific clauses within the novation agreement.

- **Definitions** ▴ This section is paramount. It must contain precise, unambiguous definitions for terms like “Original Contract,” “Effective Date,” “[Transferred Liabilities](https://prime.greeks.live/question/what-are-the-direct-liabilities-for-senior-managers-who-fail-to-prevent-counterparty-misconduct/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite),” and “[Retained Liabilities](https://prime.greeks.live/question/what-are-the-primary-hedging-restrictions-on-retained-securitization-interests/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite).”

- **Novation and Release** ▴ This clause formally effects the novation. It will state that, as of the Effective Date, the outgoing party is released and discharged from the Transferred Liabilities, and the continuing party accepts the incoming party as its new counterparty in respect of those liabilities.

- **Assumption of Liabilities** ▴ The incoming party explicitly agrees to assume and perform all obligations associated with the Transferred Liabilities and to be bound by the terms of the Original Contract as if it were an original signatory.

- **Indemnification** ▴ This is a critical risk-mitigation component. The agreement should contain cross-indemnities. The outgoing party will indemnify the incoming party against any losses arising from the Retained Liabilities. Conversely, the incoming party will indemnify the outgoing party against any losses arising from the Transferred Liabilities.

> The precision of the definitions for “Transferred Liabilities” and “Retained Liabilities” dictates the success and legal resilience of a selective novation.

The following table illustrates how liabilities might be defined and allocated in a selective novation agreement for a technology services contract.

### Table 2 ▴ Example Liability Allocation in a Selective Novation

| Liability Category | Transferred Liabilities (Assumed by Incoming Party) | Retained Liabilities (Responsibility of Outgoing Party) |
| --- | --- | --- |
| Performance Obligations | All obligations to provide services under the contract arising on or after the Effective Date. | Any breaches of service level agreements that occurred prior to the Effective Date. |
| Financial Liabilities | Responsibility for all invoices issued by the continuing party for services rendered on or after the Effective Date. | Responsibility for any unpaid invoices for services rendered prior to the Effective Date. |
| Third-Party Claims | Liability for any claims of intellectual property infringement arising from work performed by the incoming party after the Effective Date. | Liability for any ongoing litigation or claims related to work performed by the outgoing party before the Effective Date. |
| Employee Liabilities | Liabilities related to employees who transfer from the outgoing party to the incoming party to service the contract. | Liabilities for any former employees of the outgoing party who worked on the contract prior to the transfer. |

Ultimately, the execution of a selective novation is a technical legal process designed to achieve a specific commercial outcome. It requires experienced legal counsel to ensure the language is robust, enforceable, and accurately reflects the [tripartite agreement](https://prime.greeks.live/area/tripartite-agreement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), thereby preventing future disputes about the scope of the transfer.

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## References

- Sirion. “What Is Contract Novation? A Complete Guide for Business Contracts.” 2025.

- FasterCapital. “Contract Transfer ▴ Seamless Shifts ▴ Mastering Contract Transfer Through Novation.” 2025.

- Stevens & Bolton LLP. “N:Novation.”

- Macfarlanes. “Contract transfers ▴ substance over form.” 2023.

- PBL Law Group. “Assignment or Novation ▴ Key Differences and Legal Implications.”

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## Reflection

Understanding that a novation agreement can be sculpted to partition liabilities moves the instrument from a simple substitution mechanism to a sophisticated tool for corporate and contractual architecture. The knowledge that you can define the boundaries of risk transfer prompts a deeper consideration of your own operational framework. How are contractual risks currently managed in your organization during periods of change? The principles of selective novation encourage a proactive and granular approach to risk allocation, viewing contracts not as monolithic obligations but as portfolios of rights and duties that can be strategically realigned to serve evolving business objectives.

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## Glossary

<a href="https://prime.greeks.live/area/novation-agreement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Novation Agreement

Meaning ▴ A Novation Agreement functions as a formal legal instrument that extinguishes an existing contractual obligation between two parties and simultaneously creates a new contract, identical in terms, between one of the original parties and a new third party. </a><a href="https://prime.greeks.live/question/what-is-the-process-for-a-multi-party-rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Continuing Party

A multi-party RFQ is a controlled protocol for sourcing competitive, off-book liquidity while mitigating information leakage. </a><a href="https://prime.greeks.live/question/from-a-legal-perspective-how-does-novation-alter-the-fundamental-rights-of-the-original-counterparties/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Original Contract

Novation extinguishes an original contract, discharging the outgoing party's rights and duties and creating a new agreement for the incoming party. </a><a href="https://prime.greeks.live/question/what-is-the-process-for-a-multi-party-rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Outgoing Party

A multi-party RFQ is a controlled protocol for sourcing competitive, off-book liquidity while mitigating information leakage. </a><a href="https://prime.greeks.live/question/what-is-the-process-for-a-multi-party-rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Incoming Party

A multi-party RFQ is a controlled protocol for sourcing competitive, off-book liquidity while mitigating information leakage. </a><a href="https://prime.greeks.live/question/how-can-a-fair-transfer-price-be-modeled-when-market-transactions-are-scarce/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Selective Transfer

Modeling a fair transfer price with scarce data requires constructing a valuation from the internal economics of function, assets, and risk. </a><a href="https://prime.greeks.live/area/selective-novation/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Sharp, intersecting elements, two light, two teal, on a reflective disc, centered by a precise mechanism. This visualizes institutional liquidity convergence for multi-leg options strategies in digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-block-trade-execution.jpg)

## Selective Novation

Meaning ▴ Selective Novation defines a precise legal and operational mechanism for transferring specific rights or obligations pertaining to a subset of terms within an existing derivatives contract from one counterparty to another. </a><a href="https://prime.greeks.live/area/risk-allocation/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sophisticated institutional digital asset derivatives platform unveils its core market microstructure. Intricate circuitry powers a central blue spherical RFQ protocol engine on a polished circular surface](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-prime-os-unveiling-rfq-protocol-engine-market-microstructure-for-optimal-price-discovery-and-high-fidelity-execution.jpg)

## Risk Allocation

Meaning ▴ Risk Allocation refers to the systematic assignment and distribution of financial exposure and its potential outcomes across various entities, portfolios, or operational units within an institutional trading framework. </a><a href="https://prime.greeks.live/question/what-are-the-direct-liabilities-for-senior-managers-who-fail-to-prevent-counterparty-misconduct/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Potential Liabilities

Senior manager liability for counterparty misconduct is direct, personal, and mitigated only by demonstrating proactive, reasonable steps. </a><a href="https://prime.greeks.live/area/due-diligence/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Due Diligence

Meaning ▴ Due diligence refers to the systematic investigation and verification of facts pertaining to a target entity, asset, or counterparty before a financial commitment or strategic decision is executed. </a><a href="https://prime.greeks.live/question/what-are-the-primary-risks-a-dealer-assumes-when-pricing-a-collar-in-a-high-volatility-market/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Incoming Party Assumes

A dealer pricing a collar in a volatile market assumes the systemic risk of hedging in an illiquid, unstable environment. </a><a href="https://prime.greeks.live/question/what-is-the-process-for-a-multi-party-rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Outgoing Party Retains

A multi-party RFQ is a controlled protocol for sourcing competitive, off-book liquidity while mitigating information leakage. </a><a href="https://prime.greeks.live/question/in-what-scenarios-might-a-non-defaulting-party-strategically-prefer-the-standard-close-out-process-over-aet/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A transparent, precisely engineered optical array rests upon a reflective dark surface, symbolizing high-fidelity execution within a Prime RFQ. Beige conduits represent latency-optimized data pipelines facilitating RFQ protocols for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-system-architecture.jpg)

## Incoming Party Might

Preferring standard close-out is a strategic decision to exert manual control over valuation and timing in complex market or legal environments. </a><a href="https://prime.greeks.live/question/how-does-the-use-of-explainable-ai-impact-the-intellectual-property-of-proprietary-trading-models/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A polished, abstract metallic and glass mechanism, resembling a sophisticated RFQ engine, depicts intricate market microstructure. Its central hub and radiating elements symbolize liquidity aggregation for digital asset derivatives, enabling high-fidelity execution and price discovery via algorithmic trading within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-prime-os-rfq-engine.jpg)

## Intellectual Property Infringement

Explainable AI redefines trading model IP by converting computational obscurity into a new, auditable, and sensitive data asset requiring architectural protection. </a><a href="https://prime.greeks.live/question/what-are-the-direct-liabilities-for-senior-managers-who-fail-to-prevent-counterparty-misconduct/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precise metallic cross, symbolizing principal trading and multi-leg spread structures, rests on a dark, reflective market microstructure surface. Glowing algorithmic trading pathways illustrate high-fidelity execution and latency optimization for institutional digital asset derivatives via private quotation](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-execution-architecture.jpg)

## Liabilities Related

Senior manager liability for counterparty misconduct is direct, personal, and mitigated only by demonstrating proactive, reasonable steps. </a><a href="https://prime.greeks.live/question/what-are-the-primary-legal-differences-between-a-bilateral-agreement-and-ccp-novation/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central teal and dark blue conduit intersects dynamic, speckled gray surfaces. This embodies institutional RFQ protocols for digital asset derivatives, ensuring high-fidelity execution across fragmented liquidity pools](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine-3.jpg)

## Selective Novation Agreement

CCP novation legally replaces a private contract with two new ones, centralizing risk; a bilateral agreement maintains direct counterparty obligation. </a><a href="https://prime.greeks.live/question/what-are-the-direct-liabilities-for-senior-managers-who-fail-to-prevent-counterparty-misconduct/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract system interface on a global data sphere, illustrating a sophisticated RFQ protocol for institutional digital asset derivatives. The glowing circuits represent market microstructure and high-fidelity execution within a Prime RFQ intelligence layer, facilitating price discovery and capital efficiency across liquidity pools](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-execution-prime-os.jpg)

## Transferred Liabilities

Senior manager liability for counterparty misconduct is direct, personal, and mitigated only by demonstrating proactive, reasonable steps. </a><a href="https://prime.greeks.live/question/what-are-the-primary-hedging-restrictions-on-retained-securitization-interests/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract geometric forms in dark blue, beige, and teal converge around a metallic gear, symbolizing a Prime RFQ for institutional digital asset derivatives. A sleek bar extends, representing high-fidelity execution and precise delta hedging within a multi-leg spread framework, optimizing capital efficiency via RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-derivatives-rfq-execution-engine-architecture.jpg)

## Retained Liabilities

Hedging retained securitization interests is restricted to prevent neutralizing the mandated credit risk, permitting only hedges of non-credit risks like interest rates. </a><a href="https://prime.greeks.live/area/tripartite-agreement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sophisticated proprietary system module featuring precision-engineered components, symbolizing an institutional-grade Prime RFQ for digital asset derivatives. Its intricate design represents market microstructure analysis, RFQ protocol integration, and high-fidelity execution capabilities, optimizing liquidity aggregation and price discovery for block trades within a multi-leg spread environment](https://options.greeks.live/wp-content/uploads/2025/07/institutional-grade-proprietary-architecture-driving-high-fidelity-digital-asset-derivatives-execution-via-rfq-protocols-and-optimized-market-microstructure-dynamics.jpg)

## Tripartite Agreement

Meaning ▴ A Tripartite Agreement represents a foundational legal and operational framework establishing a common set of rights, obligations, and processes among three distinct parties. </a>

**Tags:** [Selective Novation](https://options.greeks.live/area/selective-novation/), [Liability Transfer](https://options.greeks.live/area/liability-transfer/), [Indemnification Clause](https://options.greeks.live/area/indemnification-clause/), [Novation Vs Assignment](https://options.greeks.live/area/novation-vs-assignment/), [Due Diligence](https://options.greeks.live/area/due-diligence/), [Mergers and Acquisitions](https://options.greeks.live/area/mergers-and-acquisitions/)	

## Discover More

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### [What Legal Protections Are Most Effective against Adverse Selection in Private Equity Deals?](https://options.greeks.live/question/what-legal-protections-are-most-effective-against-adverse-selection-in-private-equity-deals/)
![Sleek, modular system component in beige and dark blue, featuring precise ports and a vibrant teal indicator. This embodies Prime RFQ architecture enabling high-fidelity execution of digital asset derivatives through bilateral RFQ protocols, ensuring low-latency interconnects, private quotation, institutional-grade liquidity, and atomic settlement.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-system-interface-for-digital-asset-derivatives-execution.jpg)

A system of contractual assertions and risk transfer mechanisms designed to quantify and reallocate the cost of information asymmetry.

- 
### [How Can an Exclusion Clause in an Rfp Affect the Legal Obligations of the Parties?](https://options.greeks.live/question/how-can-an-exclusion-clause-in-an-rfp-affect-the-legal-obligations-of-the-parties/)
![Three metallic, circular mechanisms represent a calibrated system for institutional-grade digital asset derivatives trading. The central dial signifies price discovery and algorithmic precision within RFQ protocols. Outer elements reflect liquidity pool dynamics and high-fidelity execution in complex market microstructure, managing counterparty risk.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-and-execution-precision.jpg)

An exclusion clause in an RFP re-architects legal obligations by transferring process-related risks from the issuer to the bidders.

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### [What Are the Best Practices for Due Diligence in Crypto Options Trading?](https://options.greeks.live/question/what-are-the-best-practices-for-due-diligence-in-crypto-options-trading/)
![An abstract, multi-layered spherical system with a dark central disk and control button. This visualizes a Prime RFQ for institutional digital asset derivatives, embodying an RFQ engine optimizing market microstructure for high-fidelity execution and best execution, ensuring capital efficiency in block trades and atomic settlement.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-engine-prime-os-4.jpg)

Systematic due diligence in crypto options trading fortifies institutional capital and execution quality through rigorous operational and technological validation.

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### [What Are the Legal Risks of Relying on Common Law Frustration Instead of a Contractual Force Majeure Clause?](https://options.greeks.live/question/what-are-the-legal-risks-of-relying-on-common-law-frustration-instead-of-a-contractual-force-majeure-clause/)
![A precision-engineered apparatus with a luminous green beam, symbolizing a Prime RFQ for institutional digital asset derivatives. It facilitates high-fidelity execution via optimized RFQ protocols, ensuring precise price discovery and mitigating counterparty risk within market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-high-fidelity-digital-asset-derivatives-execution.jpg)

Relying on common law frustration invites legal uncertainty; a force majeure clause provides engineered, predictable risk control.

- 
### [Can Including a Draft Contract in an RFP Disadvantage Smaller Vendors and Reduce Competition?](https://options.greeks.live/question/can-including-a-draft-contract-in-an-rfp-disadvantage-smaller-vendors-and-reduce-competition/)
![A reflective digital asset pipeline bisects a dynamic gradient, symbolizing high-fidelity RFQ execution across fragmented market microstructure. Concentric rings denote the Prime RFQ centralizing liquidity aggregation for institutional digital asset derivatives, ensuring atomic settlement and managing counterparty risk.](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-rfq-execution-for-institutional-digital-asset-derivatives-2.jpg)

Including a draft contract in an RFP front-loads legal costs and risk, systemically disadvantaging smaller vendors and narrowing the competitive field.

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### [Mastering SAFTs for Elite Crypto Venture Returns](https://options.greeks.live/guide/mastering-safts-for-elite-crypto-venture-returns/)
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Master SAFTs to unlock elite crypto venture returns, securing unparalleled early-stage investment advantages.

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### [What Are the Most Critical Clauses to Include in an Rfp to Mitigate Owner Liability?](https://options.greeks.live/question/what-are-the-most-critical-clauses-to-include-in-an-rfp-to-mitigate-owner-liability/)
![A sleek, dark metallic surface features a cylindrical module with a luminous blue top, embodying a Prime RFQ control for RFQ protocol initiation. This institutional-grade interface enables high-fidelity execution of digital asset derivatives block trades, ensuring private quotation and atomic settlement.](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-engine-module-for-high-fidelity-execution-and-liquidity-aggregation.jpg)

An RFP mitigates owner liability by functioning as a control system, embedding precise clauses that strategically allocate risk and define accountability.

- 
### [What Are the Specific Regulatory Considerations for Operating a Low-Latency RFQ System in Crypto Options?](https://options.greeks.live/question/what-are-the-specific-regulatory-considerations-for-operating-a-low-latency-rfq-system-in-crypto-options/)
![A precision-engineered metallic component displays two interlocking gold modules with circular execution apertures, anchored by a central pivot. This symbolizes an institutional-grade digital asset derivatives platform, enabling high-fidelity RFQ execution, optimized multi-leg spread management, and robust prime brokerage liquidity.](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-core-for-institutional-trade-flow.jpg)

Operationalizing a low-latency crypto options RFQ system requires integrating stringent regulatory compliance with rapid execution capabilities.

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### [What Constitutes a Financial Institution Having a Beneficial Interest Post Merit?](https://options.greeks.live/question/what-constitutes-a-financial-institution-having-a-beneficial-interest-post-merit/)
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A financial institution has a beneficial interest post-Merit when it is the transaction's true economic recipient, not a mere conduit.

---

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---

**Original URL:** https://options.greeks.live/question/can-a-novation-agreement-be-drafted-to-selectively-transfer-only-certain-liabilities-to-the-new-party/
