In the event of a change, a “novation agreement” can be signed under the original contract.[5] Novations are most frequently used in business acquisitions and business sales. Since the new agreement had no value, TWB tried to enforce the old agreement. He filed the mechanic`s right of pledge against The Braxton and a lawsuit to enforce the right of pledge. Although there was no dispute that TWB was not paid, the court dismissed TWB`s appeal. The General Court found that the new agreement gave concrete notice to the old agreement, together with TWB`s right to recover the old agreement. According to the General Court, TWB`s only recourse is the new agreement, which has no value. Scottish law appears stricter than English law in the application of the novation doctrine and needs stronger evidence of the creditor`s agreement to the transfer of responsibility. Novation can be an unintended and deadly outcome if a company tries to settle a dispute before a dispute. As in TWB, one party may unknowingly waive the benefits or rights of an old contract, even if the other party does not do so under the new agreement.
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