Novated Purchase orders cannot be changed error

[former_member405029]

Hi Experts,

    while trying to edit the PO we are getting an error as " Novated Purchase orders cannot be changed" . I am confused that which field is used to differentiate the normal PO to that of novated PO at portal level.  Please let us know why this error occurs and how can we solve the issue ?

   Thanks in Advance.

Thanks & Regards,

Aishwarya.M

[Former Member · Accepted solution]

Hello Aishwarya,

     What's your SRM scenario, is it PPS. As novated PO error comes when you are trying to do some mass change in or transfer of PO's from one supplier to another. Please have a look to this link.

Mass Change and Novation - Features of SAP SRM Procurement for Public Sector Basis - SAP Library

Also please go through the reply of muthuraman

Thanks

Gaurav Gautam

[former_member405029 · Accepted solution]

Hi Gaurav,

     Thanks for the quick response.

    We are using Extended classic scenario.  I tried checking in check BADI, but these error is not raised in check BADI. please suggest where and why actually this error is raised and how can we differentiate the normal PO from Novated PO.

Thanks & Regards,

Aishwarya.M

[Former Member · Accepted solution]

Hello Aishwarya ,

A Novation is agreement of parties usually done in conjunction with an assignment where upon the assignment there is now a new agreement between the original party whose contract was assigned and the party to whom the contract was assigned that in effect extinguishes (cancels) the old agreement and relieves the assigning party of liability under the contract. 

For example if A and B have a contract and there is an assignment and novation of that contract by B to C, the contract would now be between A and C and B would no longer be liable to A under the contract as the “novation” extinguishes their liability.

If you wanted to prevent a novation you might include something like the following:

“This contract shall be binding on the parties and their respective successors and permitted assigns. Except in the instance of an assignment or transfer by Buyer of all or any portion of this agreement, the assigning party shall remain liable for the performance of any assigned or transferred obligations hereunder.

The requirements for a novation may vary by jurisdiction. For example in New York for there to be a novation it must specifically say it is a novation. In assignment consent letters Suppliers may try to create a novation by the words they use where the language in affect would say that Buyer may only look to the new entity going forward. Please check with the PO which supplier is being used and also check is there any third party involvement in that PO.

Thanks

Gaurav Gautam