Indeplaatsstelling
Subrogation
Substitution is the replacement of a party to an agreement or obligation by another party, whereby the original party withdraws from the legal relationship.
Substitution is a legal mechanism by which a new party fully assumes the rights and obligations of an existing party. The original party is thereby released from liability to the counterparty.
This mechanism is relevant to the transfer of contracts, such as in the sale of a business, the assumption of a lease or the assignment of receivables. In principle, the counterparty must consent to the substitution, unless the law or the agreement provides otherwise.
In practice, substitution prevents the original party from remaining liable and ensures a clear transfer of the contractual position to the new party.
“The landlord consented to the substitution of the new tenant under the existing lease agreement.”
Need legal advice?
Schedule a free consultation with one of our specialists