What is the term for a substituted contract when Buyer A adds another buyer after job loss?

In the context of real estate contracts, when a substituted contract occurs due to changing circumstances, such as Buyer A needing to add another buyer because of job loss, the term that accurately describes this process is novation. Novation refers to the act of replacing one of the original parties involved in a contract with a new party, with the consent of all parties involved. This results in a new agreement that effectively replaces the original one, thereby extinguishing the obligations of the original party and transferring those responsibilities to the new party.

The concept of novation is crucial in real estate transactions because it allows for the flexibility needed in changing circumstances without voiding the entire contract. It ensures that all parties involved are aware of and agree to the new terms, providing clarity and legal protection.

In contrast, an addendum refers to an addition made to the existing terms of a contract without altering the original agreement, an assignment transfers the benefits and obligations of a contract from one party to another without necessarily creating a new contract, and an amendment modifies the existing terms of the contract without completely replacing it. These terms do not adequately capture the complete aspect of substituting one party with another as done in a novation.