HERITAGE BANK LTD. V. AJUGWO (2024) 12 NWLR (PT. 1953) 473
ON MEANING AND NATURE OF “NOVATION”
The term “novation” denotes an agreement entered into by two or more contracting parties, thereby consenting to allow for the substitution of a new party for an existing one. The original contracting party being replaced by the new party is thereby excused. By its very nature, a novation is a new obligation that extinguishes and replaces an original contract or obligation. Novation equally applies to substitution of parties. A novation is equally termed “substituted contract”. (P. 488, paras. F-G).
HERITAGE BANK LTD. V. AJUGWO (2024) 12 NWLR (PT. 1953) 473
ON MEANING AND REQUISITES OF “NOVATION”
Novation is the substitution of a new contract for an existing one between the same or different parties. It is never presumed. The requisites for novation are a previous valid obligation, an agreement of all the parties to a new contract; the extinguishment of the old obligation and the validity of the new one. [N.N.P.C. v. Klifco (Nig.) Ltd. (2011) 10 NWLR (Pt.1255) 209 referred to.] (Pp 495, paras. E-F; 499, paras. D-E).