Contracts
A 'novation' in Arizona real estate contract law means:
AAdding a new clause to an existing contract
BSubstituting a new party or obligation for an existing one, with the consent of all parties, and releasing the original party✓ Correct
CRenewing a lease for another term
DAdding an addendum to a purchase contract
Explanation
Novation is the substitution of a new contract or party for an existing one, with all parties agreeing. The original obligation is extinguished and the original party is released.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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