In the divorce agreement between Ted and Alice, Alice agreed to assume the debt on Ted's credit card. The credit card company agrees to this arrangement. This is an example of:
A) accord and satisfaction
B) novation
C) rescission
D) revocation
E) none of the other choices

Question

Quizplus · Accepted Answer

Novation is the substitution of a new contract or obligation for an old one, with the consent of all parties involved. In this case, Alice is assuming the debt on Ted's credit card with the agreement of the credit card company, effectively replacing Ted as the debtor.

In the Divorce Agreement Between Ted and Alice, Alice Agreed