different between novatio vs novation

English

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

novation (countable and uncountable, plural novations)

(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.
(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.

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