Novation means
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substituting a new contract for the old one
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cancellation of the old contract
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modifying or altering the terms of contract such that it has the effect of substituting a new contract for the old one
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dispensing away the performance of the promise made by the other party
Reveal answer
Fill a bubble to check yourself
A
Correct answer
Explanation
Novation is the substitution of a new contract or debtor for an old one, discharging the original contract by agreement of all parties. It requires consent of all parties and creates a fresh obligation that replaces the original. Option A captures this accurately. Option C describes the process but is less precise - novation is not merely modifying terms but creating a new contractual relationship that extinguishes the old one.