What is the effect of a novation of a contract?

Novation is a legal term used to describe the transfer of contractual obligations from one party to another. In Washington State, a novation of a contract involves the substitution of a new party into an existing contract in place of one of the original parties. The original contract is discharged, and the new party assumes the rights and obligations of the original party. The most common method for novation is for one party to request the other parties to consent to a new contract which substitutes the existing parties. Once each of the parties agrees to the terms of the novation, the new contract goes into effect and the novation is complete. Novation can also occur through the mutual consent of all original parties to a contract. This consent can take the form of an expressed or implied agreement. In this scenario, the original parties to the contract agree to the same obligations, but substitute one of the original parties with the novation. The effect of a novation of a contract is that it renders the original contract null and void, and the new contract with the substituted party is established. The substituted party is then subject to the same obligations that the original party would have been held to. This means that the substituted party is responsible for fulfilling the contractual obligations as if they had been a party to it from the beginning.

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