Which of the Following Statements Regarding Novation Is False

question 19

Multiple Choice

Which of the following statements regarding novation is false?

• A) Novation refers to the creation of a new contract through the substitution of a third party for one of the original parties to a contract, with everyone's consent.
• B) Novation requires that the new debtor assume complete liability.
• C) Novation requires the creditor to accept the new debtor as principal debtor, not merely as a guarantor.
• D) Novation requires the creditor to accept the new contract in full satisfaction and substitution for the old contract.
• E) Novation requires the inclusion of a force majeure clause in order to be enforceable.

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Definitions:

Federal Income Tax

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A legal arrangement where assets are transferred into a trust for the benefit of beneficiaries by the trustor during their lifetime.

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The total value of an individual's estate that is considered when determining estate taxes, including all assets minus allowable deductions.

Alpha Stock

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