Which of the below is an example of a novation?
A)Art and Burt agree to terminate their supply contract.
B)Art and Burt enter into an agreement supported by consideration wherein Art agrees to pay a debt Burt owes Carstairs.
C)Art, Burt and Carstairs all agree that Burt will assume Art's rights and duties in a contract between Art and Carstairs.
D)All of the above are examples of a novation.

Question

Which of the below is an example of a novation? ​ ​
A)Art and Burt agree to terminate their supply contract.
B)Art and Burt enter into an agreement supported by consideration wherein Art agrees to pay a debt Burt owes Carstairs.
C)Art, Burt and Carstairs all agree that Burt will assume Art's rights and duties in a contract between Art and Carstairs.
D)All of the above are examples of a novation.

Quizplus · Accepted Answer

Novation occurs when a new contract is created to replace an old one, with the consent of all parties involved. In option C, Art, Burt, and Carstairs agree to replace the original contract between Art and Carstairs with a new contract in which Burt assumes Art's position. This is a classic example of novation, where all original parties agree to the substitution of a new party or new obligations, effectively discharging the original contract.

Which of the Below Is an Example of a Novation