novatie

Novation is a legal concept in contract and commercial law referring to the substitution of a party or obligation in a contract with a new one, resulting in the extinguishment of the original agreement and the creation of a new contract. It involves three parties: the existing debtor and creditor, and the party stepping into the contract (either as a new debtor or a new creditor).

There are two common forms. First, a substitution of the debtor, where the original debtor is replaced by a new debtor who assumes the same obligation to the original creditor. Second, a substitution of the creditor, where the original creditor is replaced by a new creditor who takes over the rights against the debtor. In many cases, the substitution is effected through a new contract that expressly extinguishes the old one and creates a fresh agreement between the remaining party and the new party. Consent of all affected parties is typically required, and a formal novation agreement is often used to document the replacement.

Novation differs from assignment. An assignment transfers only rights under a contract, usually leaving the original obligor responsible unless released. Novation transfers both rights and obligations and terminates the original contract, releasing the previous party from liability.

Common contexts include loan agreements, leases, and service or supply contracts, often used in debt restructurings, corporate reorganizations, or when an assignee assumes contractual duties. Some contracts may include anti-novation clauses that restrict substitutions.