novation

N1O1V4A1T1I1O1N1
/noʊˈveɪʃən/

noun

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.

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

OriginLatin novātiō →
UncommonScrabble 11
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Meanings

nounnovation (countable and uncountable, plural novations)

plural novations

  1. countableuncountablelawReplacement 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 http://www.cftc.gov/opa/press98/opa4163-98-att.htm Netting by novation will occur immediately upon registration of the transaction in the SCM's name.

    1 more example

    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, […].

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

Origin

  1. Latinnovātiō“a renewing, rennovation”
  2. Englishnovation

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

More words from Latin

Full word history & related roots →

Translations

Afrikaans novasie, skuldvernuwing
  • novasienew contract
  • skuldvernuwingnew contract
Bulgarian нова́ция
  • нова́ция (novácija)replacement contract
Dutch schuldvernieuwing, novatie
  • schuldvernieuwingnew contract
  • novatienew contract
Finnish novaatio, novaatio
  • novaatioreplacement contract
  • novaationew contract
French novation
  • novationnew contract
German Novation, Neuerungsvertrag
  • Novationnew contract
  • Neuerungsvertragnew contract
Indonesian novasi, novasi
  • novasireplacement contract
  • novasinew contract
Italian novazione
  • novazionenew contract
Portuguese novação
  • novaçãonew contract
Spanish novación
  • novaciónnew contract
Welsh newyddiad
  • newyddiadnew contract
Cite this entry
APA

novation. (n.d.). In WatkinsX Dictionary. Retrieved November 2, 2026, from https://dictionary.watkinsx.com/word/novation

MLA

“novation.” WatkinsX Dictionary, https://dictionary.watkinsx.com/word/novation. Accessed November 2, 2026.

Chicago

WatkinsX Dictionary, s.v. “novation,” accessed November 2, 2026, https://dictionary.watkinsx.com/word/novation.

Source: novation on Wiktionary, CC BY-SA 4.0.