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Novate vs Novation - What's the difference?

novate | novation | Related terms |

Novation is a related term of novate.



In lang=en terms the difference between novate and novation

is that novate is to replace a debt or other obligation while novation is a new contract between the original contracting parties whereby the first obligation is extinguished and a new obligation is substituted.

As a verb novate

is to replace something with something new.

As a noun novation is

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.

novate

English

Verb

(novat)
  • To replace something with something new
  • (legal) To replace a debt or other obligation

    • Related terms

    * novation

    References

    * OED 2nd edition 1989 ----

    novation

    English

    (wikipedia novation)

    Noun

    (-)
  • (legal) 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.
  • * Netting by novation will occur immediately upon registration of the transaction in the SCM's name. — London Clearing House submission to the CFTC [http://www.cftc.gov/opa/press98/opa4163-98-att.htm]
  • (legal) A new contract between the original contracting parties whereby the first obligation is extinguished and a new obligation is substituted.
  • * An example of a novation is where an original debt which was payable in two instalments is novated to become payable in five installments.

    • Related terms

    * novate * novatio