Gill and Mike are the original parties to a contract.Mike is obligated to design a brochure for Gill's massage business.They subsequently make an agreement with Eric that Eric should take the place of Mike and assume all of Mike's rights and duties under the contract.The agreement releases Mike from his obligations under the contract.This agreement is:
A)a delegation.
B)an accord and satisfaction.
C)an assignment.
D)a novation.

Question

Quizplus · Accepted Answer

This is a novation because all parties (Gill, Mike, and Eric) agreed to substitute Eric for Mike, effectively releasing Mike from his contractual obligations. A novation requires the consent of all parties involved, and the original contract is replaced entirely by a new one, with Eric assuming all of Mike's rights and obligations.

Gill and Mike Are the Original Parties to a Contract