A novation is the mutual agreement between the parties, to an existing contract, for its discharge by the substitution of a new valid obligation. To prove a novation, four elements must be shown: (1) the existence of a previously valid contract; (2) the agreement of the parties to cancel the first contract; (3) the agreement of the parties that the second contract replace the first; and (4) the validity of the second contract. From a legal standpoint, a novation is a form of affirmative defense, and the party who advocates a novation has the burden of proving it by clear, satisfactory evidence.
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