Contracts, 12% of the examination
Novation
Substituting a new party or a new obligation, releasing the original party from liability.
A novation replaces an existing obligation with a new one, substitutes a new debtor, or substitutes a new creditor, with intent to extinguish the old obligation. It requires the agreement of the parties whose rights and duties are affected. Assignment transfers contractual rights, and delegation transfers duties, but neither alone releases the original obligor. A true novation supplies that release.
Test the distinction
A relevant question from Contracts, selected because its facts or explanation use this concept.
A seller and buyer agree to substitute a new buyer, releasing the original one entirely. What is this?
Written to DRE's published topic list. Not a real examination question, since reproducing those is a misdemeanor under B&P Code section 123.
Primary sources
Use these authorities when a course summary, forum answer, or older flashcard conflicts with the current California rule.