Question

Molly and Craig are the original parties to a contract. Craig is obligated to design a Website for Molly. They subsequently make an agreement with Eric that Eric should take the place of Craig and assume all of Craig's rights and duties under the contract. The agreement releases Craig from his obligations under the contract. This agreement is:
a. a novation.
b. an accord and satisfaction.
c. an assignment.
d. a nullification

Answer 1

Answer:

A. A Novation

Explanation:

A novation is contract law or business law term that can represent the following situations:

1. Replacing an already established obligation to perform with another obligation

2. Adding a new obligation to perform to the already established obligation

3. Replacing a party to an agreement who is supposed to perform an obligation with a new party.

Replacing a party to an agreement with a new party

The kind of novation that has occurred in the question is the third type where the obligations of Craig to design a website for Molly has been replaced with the agreement by Eric to take Craig's place and design the website for Molly.

The Novation clause is that: all parties involved in this type of contract must consent to the changes