Barbara and Johann are parties to a contract. They agree on a novation. The novation requires
A) the existence of a previous, valid obligation.
B) consideration greater than $5,000.
C) performance of the original contract by all of the parties.
D) an accord and satisfaction.

Question

Barbara and Johann are parties to a contract. They agree on a novation. The novation requires
A) ​the existence of a previous, valid obligation.
B) ​consideration greater than $5,000.
C) ​performance of the original contract by all of the parties.
D) ​an accord and satisfaction.

Quizplus · Accepted Answer

Novation is the substitution of a new contract for an existing one, with the agreement of all parties involved. Therefore, it requires the existence of a previous, valid obligation that will be discharged or canceled with the formation of the new contract. The other options are not necessarily required for a novation to be valid.

Barbara and Johann Are Parties to a Contract