The substitution of an old contract for a new one that replaces an obligation or a party for another is a:
A) novation.
B) warranty.
C) assignment.
D) delegation of duties.

Question

Quizplus · Accepted Answer

The term novation refers to the substitution of a new contract for an old one, where a new party replaces an existing one or where the obligation under the old contract is replaced with a new one. This is different from an assignment, which only transfers the rights to a third party, and a delegation of duties, which only transfers the performance of a task to another party. A warranty is a guarantee of the quality of a product or service.

The Substitution of an Old Contract for a New One