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Contracts • Excuse of Non-Performance
K#140
Legal Definition
A novation requires both parties to original contract to agree to replace one party and excuse them from liability. A delegation does not require both parties to agree, nor does it excuse the original party from liability.
Plain English Explanation
"Delegation" means that you are authorizing someone else to do something for you. Unless a contract specifically says that delegations are not allowed, then you are free to delegate just about any obligation you want. However, even if the obligation is delegated to someone else, the liability remains with the original party that agreed to the contract. In other words, if I have an obligation to pay someone $100, I can delegate this obligation to my wife by asking her nicely to write a check and mail it for me. If my wife forgets to send the check, I'm still liable for not paying $100.
In contrast, a novation legally replaces the parties in the contract, which cuts all liability ties between the original parties and the new parties. Because it affects the contract so drastically, it requires all parties to agree to it in order for it to be effective.
In contrast, a novation legally replaces the parties in the contract, which cuts all liability ties between the original parties and the new parties. Because it affects the contract so drastically, it requires all parties to agree to it in order for it to be effective.
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Related Concepts
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