different between novate vs novation

English

Etymology

Borrowed from Latin nov?, nov?tus.

Verb

novate (third-person singular simple present novates, present participle novating, simple past and past participle novated)

1. To replace something with something new
2. (law) To replace a contract (especially a financial contract) with one or more new contracts.

Related terms

• novation
• innovate
• renovate

References

• OED 2nd edition 1989

Latin

Participle

nov?te

1. vocative masculine singular of nov?tus

English

Etymology

Borrowed from Latin nov?ti? (“a renewing, rennovation”), from nov?, from novus (“new”). Compare novel, novelty.

Pronunciation

• IPA^(key): /no??ve???n/

Noun

novation (countable and uncountable, plural novations)

1. (law) 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.
   • 1998, London Clearing House, submission to the U.S. Commodity Futures Trading Commission [1]

     Netting by novation will occur immediately upon registration of the transaction in the SCM's name.

2. (law) A 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.

Related terms

• novate
• novatio

Translations