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Novation

/noʊˈveɪʃən/

Replacement of a contract with one or more new contracts, in particular in financial markets the replacement of a contract between a particular buyer and seller with contracts between the clearing house and each party.

📖 Definitions of "Novation"

noun
  1. 1

    Replacement of a contract with one or more new contracts, in particular in financial markets the replacement of a contract between a particular buyer and seller with contracts between the clearing house and each party.

  2. 2

    A new contract between the original contracting parties whereby the first obligation is extinguished and a new obligation is substituted.

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