novation

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Novation

Novation

1. The transfer of a contract from one party to another by mutual consent of the original counterparties and the concurrence of the new party.

2. See: Rollover.

novation

The substitution of one debt with another debt.

novation

The substitution of a new contract, debt, or obligation for an existing one. Usually encountered when a tenant assigns the lease to another,or when a new building owner requires all existing tenants to execute novation agreements.The effect is to extinguish all obligations under the old agreements and replace them with the new obligations.

References in periodicals archive ?
The Company also reduced loss reserves by approximately $40 million, representing the amount the Company's estimated at year-end to novate the agreement.
Additionally, the Company will attempt to novate the current EPA contract, as well as sell the Seattle office.
In June 2011, Fitch was notified of a proposal to novate the hedge counterparty to Wells Fargo.