Legal Definitions - objective novation

Objective novation is a legal term that refers to the substitution of a new obligation for an old one. This can happen in a few different ways:

• Replacing an existing obligation with a new one
• Replacing an original party with a new party
• Creating a new obligation between the same parties

For example, let's say that Person A owes Person B $100. Person C also owes Person B $100. If Person B agrees to accept Person C as a debtor in place of Person A, and if Person C agrees to accept Person B as their creditor in place of Person A, this would be an example of objective novation. The old obligation between Person A and Person B is replaced with a new obligation between Person B and Person C.

Another example of objective novation might be if a company takes over another company and assumes their debts and obligations. The old obligations are replaced with new ones under the new ownership.

Overall, objective novation is a way to transfer obligations from one party to another, with the consent of all parties involved.