ContractsQuestion 54 of 100
The substitution of a new contract or new party for an existing one, releasing the original obligation, is called:
a.Assignment
b.Rescission
c.Novation
d.Ratification
Explanation
Novation replaces an original contract or party with a new one, and the original obligation is discharged. In an assignment, the original party may remain secondarily liable, whereas novation fully releases them. All parties must agree to a novation.
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