Contracts
In Florida, which of the following best describes 'novation' in a real estate contract?
AThe addition of a new clause to an existing contract
BThe substitution of a new party or obligation for an old one, releasing the original party✓ Correct
CThe cancellation of a contract without penalties
DThe conversion of a personal property contract to a real property contract
Explanation
Novation is the substitution of a new contract, party, or obligation for an existing one. For example, if a buyer assigns their contract to a new buyer AND the seller agrees to release the original buyer, a novation has occurred.
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