Asked by Andrea Weitoschova on Apr 28, 2024
Verified
Al owes Tracy $500, due June 1. Al, Tracy, and Ted mutually agree that Ted will pay Tracy instead of paying Al the money Ted owes Al. Such an agreement is an example of:
A) an accord.
B) a novation.
C) a satisfaction.
D) a rescission.
Novation
The act of replacing an existing contract with a new one, where a different party assumes the rights and obligations of the original party.
Accord
An agreement in contract law where one party agrees to accept something different (often less) than what was initially agreed upon as satisfactory performance.
Satisfaction
The fulfilment of a requirement, obligation, or the to fulfillment of a condition stipulated in a contract.
- Explain the process through which contracts can be terminated by mutual consent and the effect of legal provisions.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
B
Explanation :
A novation occurs when a new contract replaces an old contract, with the consent of all parties involved. In this case, Ted's agreement to pay Tracy instead of Al, with all parties' agreement, constitutes a novation, as it replaces the original obligation between Al and Tracy with a new one involving Ted.
Learning Objectives
- Explain the process through which contracts can be terminated by mutual consent and the effect of legal provisions.