novation

  1. Noun.  (legal) 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. Noun.  (legal) A new contract between the original contracting parties whereby the first obligation is extinguished and a new obligation is substituted.

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This entry was last updated on RefTopia from its source on 3/20/2012.