Novatio

Novatio, also spelled novation, is a legal concept referring to the substitution of a new obligation for an existing one, resulting in the extinguishment of the original contract. The term derives from Latin novatio, meaning renewal or modernization.

In classical Roman law, novatio described the process by which an old obligation is extinguished and replaced by a new one, often involving a change of party or terms. In modern civil law jurisdictions, novation is used to transfer or modify liabilities through a three-party agreement—original debtor, original creditor, and a new party who assumes the obligation or a new contract that replaces the old one. The essential effect is that the old obligation ceases to exist, and a new one arises. A novation typically requires the express consent of all affected parties; it is not accomplished by mere assignment of rights and may require formal writing or registration depending on jurisdiction.

Forms include substitution of the debtor (the old debtor is released and a new debtor becomes liable), substitution of the creditor (the obligation is owed to a new creditor), and substitution of the obligation’s terms (the old contract is replaced by a new contract with different terms).

Novation differs from assignment in that assignment transfers rights without necessarily discharging the original obligation.

Limitations and notes: acceptance by all parties is usually necessary; lenders or contract terms may impose restrictions; some jurisdictions treat novation as a fresh contract, subject to the statute of limitations anew.