The substitution of a new contract, debt, or obligation for an existing one, with the agreement of all parties, which extinguishes the original obligation.
From Latin 'novatio' meaning 'renewal' or 'making new,' derived from 'novus' (new). Roman law developed this concept to allow parties to modify contractual relationships while clearly ending previous obligations.
Novation is like getting a complete legal do-over! Unlike contract modifications that just change terms, novation actually kills the old agreement and births a completely new one—which can be crucial for avoiding liability under the original deal.
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