Oregon 30-Hour Real Estate Law Practice Test

What was the example of Dewey convincing his son to replace him in the purchase contract?

1. Assignment

2. Novation

3. Reassignment

4. Modification

The correct answer is: Novation

The concept of novation is key in understanding how Dewey convinced his son to replace him in the purchase contract. Novation refers to the legal act of replacing one of the parties in an agreement, transferring all rights and obligations to the new party. In this scenario, when Dewey decided that his son would take over the purchase contract, he effectively created a situation where the original contract is terminated, and a new contract is formed between the seller and the son. This ensures that Dewey is released from any further liabilities pertaining to the contract, making his son the new party responsible for fulfilling the contract’s terms. Other concepts mentioned, such as assignment, typically involve one party transferring some or all of their rights and obligations to another party without releasing the first party from liability. This is different from novation, where the original party is entirely absolved of their obligations. Modification refers to changing the terms of the contract itself, rather than changing the parties involved. Reassignment is a less commonly used term and doesn’t carry the same legal implications that novation does in this context. Therefore, novation is the correct choice for this scenario, as it accurately describes the process of replacement in a contractual relationship.