Contracts
Novation in a contract context means:
AAdding an addendum to an existing contract
BSubstituting a new party or obligation for an old one, releasing the original party✓ Correct
CVoiding a contract due to misrepresentation
DExtending the closing date by written agreement
Explanation
Novation substitutes a new contract, party, or obligation for the original, with the consent of all parties, releasing the original party from liability. In real estate, it often arises when a buyer assumes a mortgage and the lender releases the original borrower.
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