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.