Novation

In its simplest terms, novation is when the parties to contract replace an old contractual obligation with a new one. The consent of all parties is required. When novations occurs, the old contract is extinguished and has no more legal effect. The new contract governs going forward. This concept can play an important role in family law disputes because when parties create a second agreement to override a first, it is not uncommon for one party to become dissatisfied with the new terms and insist on returning to the old terms. But the new contract in most cases should govern. The exception is where the parties’ agreement conflicts with a Court order. In those cases, the Court order still governs. For example, if Joe is ordered to pay Mary $1,000.00 per month in child support, but, five months later, the agree that Joe only has to pay $500.00, their agreement has not changed the Court order. So, legally, Joe is still required to pay $1,000.00. What the parties should do in such a situation is submit the $500.00-a-month agreement to the Court for approval and make that the new Court order.