Breach of Contract Law
Novation
The substitution of a new contract or a new party in place of an existing one, with the consent of all parties, discharging the original obligation.
Novation is used when parties want to replace an existing contract with a new one, or bring in a new party in place of an original one — for instance, when a business is transferred and a new owner takes over existing contractual obligations, with the other party's consent.
Unlike a simple assignment, novation requires the consent of all original parties, since it effectively discharges the original contract entirely.
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