A novation in an Indiana real estate contract:
Correct Answer
B) Substitutes a new party and completely releases the original party from the contract obligations
A novation substitutes a new party for an original party, completely releasing the original party. Unlike an assignment, which transfers rights but may retain original party liability, novation provides full release.
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Related Topics & Key Terms
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Key Terms:
Related Concepts
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
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