Question

Lisa and mandy have a contract. mandy wants out of the contract; carla sue is willing to take mandyís place, which is satisfactory with lisa. when the carla sue for mandy exchange is made, this is known as:

Answer 1

This is a novation. In this case, Mandy is being replaced in her obligation with Carla Sue. The obligations that were present in the first contract will now all transfer to Carla Sue. The difference between a novation and an assignment is that all parties have to be aware of the transfer and have agreed to it beforehand.