Securitisation glossary by Vinod Kothari
Novation - A term in English law meaning the substitution of one party to a contract by another, with the consent of the other contracting party. For example, A and B have a contract, and now A wants to transfer his rights and obligations under the contract with the sanction of C - this is a case of novation. Novation is required where A wants to transfer both the rights and obligations under the contract. Compare with assignment which is normally only of rights under a contract, and does not require the sanction of the other contracting party. Also see sub-participation, subrogation.
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