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NOVATION IN CONTRACT LAW – WHERE PARTIES CHANGE

Dictum

If however, the parties to the contract have changed or can be said to have changed in the interim, the contract for the design of NAIL Headquarters would then be between the new parties to it and the obligation to pay for the work done will be on the new party to it. This is because of the concept of Novation of contract.

— Agbaje, JSC. Ashibuogwu v AG Bendel State (1988) – SC.25/1986

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NOVATION & THREE KINDS OF NOVATION

Blacks Law Dictionary 6th Edition at page 1064 as:- “A type of substituted contract that has the effect of adding a party, either as obligor or obligee, who was not a party to the original duty. Substitution of a new contract, debt or obligation for an existing one, between the same on different parties.” “In the Civil Law, there are three kinds of novation: where the debtor and creditor remain the same, but a new debt takes the place of the old one; where the debt remains the same but a new debtor is substituted; where the debt and the debtor remain, but a new creditor is substituted.”

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