Contracts
Novation in a contract context means:
AAdding a new party while retaining the original parties
BSubstituting a new obligation or party for an old one, releasing the original party from liability✓ Correct
CExtending the closing date by mutual agreement
DCanceling the contract without any new obligations
Explanation
Novation substitutes a new contract or party for an existing one, with the consent of all parties, and releases the original party from further obligation. In real estate, it is commonly used when a buyer assumes a seller's mortgage and the lender releases the seller.
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