Question

Lon has just come home from serving in the Marines and contracts with a local car dealership to purchase a car. The car must be ordered, and payment is to be made when the car arrives. The next day, Lon receives orders to return to active duty. Realizing that he doesn't need the car, he brings Tony to the dealership and asks that Tony substitute for him. Tony will take delivery and ownership of the car, and Tony will pay the dealership upon delivery. The dealership agrees to have Tony substitute for Lon. What has occurred?

Answer 1

Answer:

The correct answer is:  A novation.

Explanation:

A novation is the replacement of individuals in a contract with the consent of both parties. The new party takes all the obligation of the initial party and releases the last one from all duty. The novation must be signed for the transferor, the transferee, and the contracting party.