A novation occurs
A) when two parties agree to terminate a contract and substitute a new contract.
B) when a contract is amended by agreement between the parties.
C) when a novel or new situation arises and the terms of a contract are changed.
D) when a stranger to the contract is permitted to obtain rights under the contract.
E) when a stranger to a contract enters into a new agreement with the parties that permits him or her to obtain rights under the original contract.

Question

Quizplus · Accepted Answer

A novation occurs when two parties agree to terminate a contract and substitute a new contract. This can occur when there is a change in circumstances that requires a different agreement, or when one of the parties wishes to be released from their obligations under the original contract. The novation process involves the agreement of all parties involved and can result in the creation of a completely new contract.

A Novation Occurs