Contracts
A novation in a Wyoming real estate contract occurs when:
AA buyer backs out and forfeits their earnest money
BAn original party to a contract is replaced by a new party, releasing the original party from liability✓ Correct
CA contract term is amended by mutual agreement
DA contract is assigned with the original party remaining liable
Explanation
Novation replaces one party to a contract with a new party, with all parties' consent, and releases the original party from further liability. This differs from assignment, where the original party may remain secondarily liable.
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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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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