Question

Q15 Replacement of an old contract by a new one is
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Answer 1

Answer:

The essence of novation lies in the intention of both the parties to substitute the old with the new one, and not in the similarity/dissimilarity between the terms of the old and new contract.

Explanation:

Answer 2

Replacement of an old contract by a new one is novation.

• Novation refers to the act of replacing an existing contract with a new one backed by the mutual agreement of both the parties involved.
• It is commonly applicable in corporate takeovers or business sales.
• It allows negotiation among the concerned parties regarding the terms and conditions of the replacement contract.