Contracts Law. Novation is the substitution of a new obligation for an existing one. No particular form is required; it may be written, oral, or implied from conduct. A novation requires an intent to discharge the old contract, mutual assent, and consideration. Intent does not require an express statement; courts look to context, examining the evidence, conduct, and the surrounding circumstances. Changing the subject matter of a contract, or a material term, evinces the required intent. The mutual surrender of rights under the original agreement constitutes consideration.
