Monday, April 29, 2024, 2:04 AM
Site: America's Real Estate Academy, Inc.
Course: America's Real Estate Academy, Inc. (AREA)
Glossary: Real Estate Glossary
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novation

is a change in a contract that involves a replacement agreement or a replacement of a party.

Example: A homeowner refinances a mortgage with the same mortgage company. The parties remain the same, but the old agreement (mortgage) is substituted with a new agreement. That is called a novation of the contract.