novation

no·va·tion   (nō-vā'shən)    n.   Law Substitution of a new obligation for an old one. [Late Latin novātiō, novātiōn-, from Latin, a renewing, from novātus, past participle of novāre, to make new, from novus, new; see newo- in Indo-European roots.]

Novation

1.The act of replacing one participating member of a contract with another.

2. The exchange of new debts or obligations for older existing ones.

Investopedia Commentary

1. All rights, duties, and terms are transferred to the new party upon consent of all parties affected.

2. A method used to extend the life of debt and obligations. Very similar to a rollover.

See also: Debt, Rollover

novation

The substitution of one debt with another debt.

Main Entry: no·va·tion
Pronunciation: nO-'vA-sh&n
Function: noun
Etymology: Late Latin novatio renewal, legal novation, from Latin novare to make new, from novus new
: the substitution by mutual agreement of one obligation for another with or without a change of parties and with the intent to extinguish the old obligation novation —Boccardi v. Horn Construction Corporation, 612 New York Supplement Reporter, Second Series 180 (1994)> —compare ACCORD 3 substituted contract at CONTRACT