Novation
From ACT Wiki
Law.
- A method of loan transfer, which transfers the rights and obligations of a lender by creating in law a new ('nova') contract between the parties, on the same terms as the original agreement except that the transferee has taken the place of the transferor.
- More generally, the legal process of creating a new contract, with the commercial effect of transferring legal rights and obligations. Another example is the novation of trading contracts through a central counterparty.