Contracts
What is a 'novation' in a Nevada real estate contract context?
AA new term added to an existing contract by one party
BThe substitution of a new party for an original party in a contract, with the consent of all parties, releasing the original party from their obligations — the new party takes on all rights and duties✓ Correct
CA Nevada court process for voiding fraudulent contracts
DA contract modification that reduces the purchase price
Explanation
Novation replaces an existing party with a new party, releasing the original party from all obligations. In Nevada real estate, novation occurs when a buyer is replaced by a new buyer in the purchase contract — all parties (including the seller) must consent.
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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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