novation

English

Etymology

Borrowed from Latin novātiō (“a renewing, rennovation”), from novō, from novus (“new”). Compare novel, novelty.

Pronunciation

• IPA^(key): /noʊˈveɪʃən/

Noun

novation (countable and uncountable, plural novations)

1. (law) 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.
   • 1998, London Clearing House, submission to the U.S. Commodity Futures Trading Commission [1]

     Netting by novation will occur immediately upon registration of the transaction in the SCM's name.

   • 2024 September 18, 'Industry Insider', “GBR starts to take form”, in RAIL, number 1018, page 84:

     A similar novation of infrastructure ownership was seen as a logical development for the operation of Merseyrail services. But this has remained with Network Rail, […] .

2. (law) A new contract between the original contracting parties whereby the first obligation is extinguished and a new obligation is substituted.

   An example of a novation is where an original debt which was payable in two instalments is novated to become payable in five installments.

Related terms

• novate
• novatio

Translations

replacement contract

• Bulgarian: новация (bg) f (novacija)
• Finnish: novaatio
• Indonesian: novasi

new contract

• Afrikaans: novasie, skuldvernuwing
• Dutch: schuldvernieuwing f, novatie (nl) f
• Finnish: novaatio
• French: novation (fr) f
• German: Novation f, Neuerungsvertrag m
• Indonesian: novasi
• Italian: novazione (it) f
• Portuguese: novação f
• Spanish: novación (es) f
• Welsh: newyddiad m

The translations below need to be checked and inserted above into the appropriate translation tables. See instructions at Wiktionary:Entry layout § Translations.

Translations to be checked

• Afrikaans: ^{(please verify)} novasie, ^{(please verify)} vernuwing, ^{(please verify)} novatio