Contracts
Novation in a real estate contract occurs when:
AA new party is substituted for an original party, releasing the original party from liability✓ Correct
BThe contract terms are modified without changing parties
CA contingency is removed from the contract
DThe earnest money deposit is increased
Explanation
Novation substitutes a new party for an original party with the consent of all parties, releasing the original party from all further obligation under the contract.
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