novation

noun

no·va·tion | \nō-ˈvā-shən

Definition of novation

: the substitution of a new legal obligation for an old one

Examples of novation in a Sentence

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Under the rules in six large EU member states analysed by the International Swaps and Derivatives Association (ISDA), a global trade body, novations and compressions would be considered regulated activities. — The Economist, "Standing novationsBrexit will give the derivatives market a nasty headache," 12 Oct. 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'novation.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

History and Etymology for novation

borrowed from Latin novātiōn-, novātiō, from novāre "to make new, renew, replace an existing legal obligation with a new one" (derivative of novus "new") + -tiōn-, -tiō, suffix of verbal action — more at new entry 1

Late Latin novatio renewal, legal novation, from Latin novare to make new, from novus new

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The first known use of novation was in 1682

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novation

noun

no·va·tion | \nō-ˈvā-shən

Legal Definition of novation

: the substitution by mutual agreement of one obligation for another with or without a change of parties and with the intent to extinguish the old obligation no evidence that the contract was assigned, or that there was a novation — Boccardi v. Horn Constr. Corp., 612 N.Y.S.2d 180 (1994) — compare accord sense 3, substituted contract at contract