Contracts
In Indiana, the term 'novation' in a real estate context means:
AAdding an addendum to a contract
BSubstituting a new party or obligation for an old one, with all parties' consent, extinguishing the original obligation✓ Correct
CExtending the contract term without other changes
DRecording the contract with the county
Explanation
Novation is the substitution of a new contract or new party for an existing one, with all parties consenting. The original obligation is extinguished.
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Key Terms to Know
Option Contract
A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Earnest MoneyA 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.
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