Definition, Meaning & Synonyms

novate

Verb

/ˈnoʊveɪt/

Definition

To replace an old obligation with a new one, transferring the rights and responsibilities to a new party.

Examples

The company decided to novate the contract to a different supplier to enhance service quality.
In business transactions, it’s common to novate agreements when partnerships change.

Meaning

The term ‘novate’ refers to the legal process of substituting one of the parties in a contract with a new one while ensuring that the original obligation is extinguished.