Gliding Light,LLC,and Hang Gliders,Inc.,are parties to a contract. They subse-quently agree that High Riders Inc. should take Gliding Light's place and assume all of its rights and duties under the contract. This is
A)an agreement to rescind.
B)an accord and satisfaction.
C)a novation.
D)a settlement agreement.

Question

Quizplus · Accepted Answer

A novation is an agreement between the parties to a contract to substitute a new party for one of the original parties. In this scenario, Gliding Light is being substituted by High Riders Inc. with respect to all rights and duties under the contract. This is a common way for parties to restructure their contractual relationships without having to terminate the original contract and enter into a new one. A novation requires the consent of all parties involved and may be evidenced by a written document signed by all parties.