Novation agreements

Hi I am just asking a  question in re: to novation agreements. 

If in this instance, a company claims to cease trading on a certain date, say 31st December 2016 due to the fact they are being merged with another company. They then assume a different company number etc and claim that the old company ceased trading on the 31st December 2016.

They have several contracts and agreements in place with several bodies, both public and private. They request a novation agreement in the following year, say early January 2017 (after they claim to have ceased trading) and those agreements are not signed to by all parties for months, say in this instance, May 2017, the following year after they ceased trading.

If the novation agreement was not signed until May 2017 and the company in question continued to have transactions with companies that hadn’t signed off on a novation agreement, would the said company still be trading in the period “January 2017-May 2017” despite claims of a cease of trading in December 2016?

Thanks in advance for your response.

1.29K viewscontract law

Alasdair Taylor's Answer

I think a full analysis of all the documents and circumstances would be necessary to answer this questions.

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