Asked by Kayla Medlin on Jun 24, 2024
Verified
Fiona owed Lutz $5,000.As the result of an unrelated transaction,Lutz owed Bing that same amount.The three parties signed an agreement that Fiona would pay Bing instead of Lutz and Lutz would be discharged from all liability.The agreement among the parties is:
A) unenforceable for lack of consideration.
B) voidable at Bing's option.
C) an accord and satisfaction.
D) a novation.
Novation
The act of replacing an old obligation with a new one, substituting a new party into an existing agreement or completely replacing the original contract.
Accord And Satisfaction
A legal contract wherein parties agree to settle a dispute by accepting terms that differ from the original obligation.
- Identify the differences between novation and other forms of contract modifications.
Verified Answer
KJ
Kevin JoudiJun 25, 2024
Final Answer :
D
Explanation :
Novation allows the original obligor to be discharged and a new obligor to be substituted in his/her place.
Learning Objectives
- Identify the differences between novation and other forms of contract modifications.