what is novation 
novation is the replacement of one of the parties in an agreement between two parties with the consent of all three parties involved to novate is to replace an old obligation with a new one for example a supplier who wants to relinquish a business customer might find another source for the customer if all three agree the contract can be torn up and replaced with a new contract that differs only in the name of the supplier the old supplier relinquishes all rights and obligations of the contract to the new supplier 