Meaning of Novation | Babel Free

Definitions

1. Replacement of a contract with one or more new contracts, in particular in financial markets the replacement of a contract between a particular buyer and seller with contracts between the clearing house and each party.
   countable, uncountable
2. A new contract between the original contracting parties whereby the first obligation is extinguished and a new obligation is substituted.
   countable, uncountable

Equivalents

Examples

“1998, London Clearing House, submission to the U.S. Commodity Futures Trading Commission http://www.cftc.gov/opa/press⟳98/opa4163-98-att.htm Netting by novation will occur⟳ immediately upon registration of the transaction in the SCM's name⟳.”

“A similar novation of infrastructure ownership was seen as a logical development for the operation of Merseyrail services. But this has remained with Network Rail, […].”

“An example of a novation is where an original debt which was payable in two instalments is novated to become⟳ payable in five installments.”

CEFR level