Contracts
Novation
Substituting a new contract or a new party, releasing the original one
The word to look for is "released". A buyer who assumes a seller’s mortgage with the lender’s agreement to release the seller has achieved a novation; without that release, the seller stays on the hook.
How the exam asks about it
Novation releases; assignment does not. That is the whole distinction and it is worth a mark almost every time it appears.
Related terms
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