A novation in South Dakota real estate differs from an assignment because a novation:
Correct Answer
B) Substitutes a new party and releases the original party from liability
A novation completely substitutes a new party for the original party, releasing the original party from all obligations under the contract. Unlike an assignment, a novation requires the consent of all parties and creates an entirely new contractual relationship.
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Related Topics & Key Terms
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Key Terms:
Related Concepts
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
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