Novation differs from assignment in that novation:
Correct Answer
B) Substitutes a new party and completely releases the original party from liability
Novation substitutes a new party for an original party in a contract, completely releasing the original party from all obligations. This distinguishes it from assignment, where the original party may remain secondarily liable. All parties to the contract must consent to a novation.
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Related Topics & Key Terms
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Related Concepts
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
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