Multiple choice

A contract is discharged by 'novation', which means

  1. cancellation of the existing contract

  2. change in one or more terms of the contract

  3. substitution of the existing contract for a new one

  4. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Novation is the substitution of a new contract for an existing one, typically involving the replacement of one party or the alteration of terms with all parties' consent. The original contract is extinguished and replaced by the new contract. It is not merely cancellation (which ends without replacement) or modification (which changes terms without substitution).

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