novation
Meanings
noun
- Replacement of a contract with one or more new contracts, in particular in financial markets the replacement of a contract between a particular buyer and seller with contracts between the clearing house and each party.
- A new contract between the original contracting parties whereby the first obligation is extinguished and a new obligation is substituted.
Pronunciation
Word forms
Etymology
Borrowed from Latin novātiō (“a renewing, rennovation”), from novō, from novus (“new”). Compare novel, novelty.
Related words
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