Contracts
In Oregon, what is a 'novation' in the context of real estate contracts?
AA new addendum to an existing contract
BThe substitution of a new party or obligation for an old one in a contract, with the original party's release✓ Correct
CThe automatic renewal of a lease agreement
DThe replacement of a verbal agreement with a written one
Explanation
Novation substitutes a new party or obligation for an existing one, releasing the original party from liability. In real estate, novation occurs when a new buyer assumes a seller's obligations under a contract and the seller is released — or when one loan is replaced with an entirely new loan. All parties must agree to the novation for it to be effective.
Related Oregon Contracts Questions
- If a seller fails to deliver title to a buyer at closing without legal justification, the buyer's remedy of 'specific performance' means:
- In Oregon, a buyer's offer includes an inspection contingency giving the buyer 10 days to complete inspections. If the buyer does not act within 10 days, what typically happens?
- An Oregon buyer submits an offer with a 10-day inspection contingency. On day 10, the buyer's inspector delivers a report, but the buyer's agent forgets to respond before the deadline. What happens to the contingency?
- Which of the following terms refers to the seller's guarantee in a warranty deed that they will defend the buyer's title against all claims?
- An Oregon purchase agreement contains the phrase 'seller to provide clear title at closing.' The most appropriate way to ensure clear title is for the buyer to:
- An Oregon purchase contract is 'subject to buyer's review and approval of CC&Rs.' This is a type of:
- Which of the following is a 'void' contract (not just voidable)?
- In Oregon, the term 'earnest money' and 'deposit' are:
Practice More Oregon Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Oregon Quiz →