ContractsContract_assignment_and_novationEASY
The seller, buyer, and incoming investor agree that the investor will replace the buyer under the contract and that the original buyer is fully released from future liability. What is this called?
Correct Answer
B) Novation
Novation is correct because the facts match the substitution of a new party or obligation for an old one with the consent of all parties, releasing the original obligor. That is the best description of the relationship, right, or legal concept tested here.
Answer Options
A
Loan assumptionB
NovationC
ConsiderationD
Mutual releaseWhy This Is the Correct Answer
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Why the Other Options Are Wrong
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Deep Analysis of This Contracts Question
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Background Knowledge for Contracts
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Real World Application in Contracts
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Common Mistakes to Avoid on Contracts Questions
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Related Topics & Key Terms
Key Terms:
contract_assignment_and_novationcontractsnovationsubstitution
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