California Real Estate Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the California Real Estate Exam with confidence. Engage with interactive questions designed to enhance your understanding of real estate principles, laws, and practices. Prepare thoroughly for your licensing test and ensure you have the knowledge to succeed in your real estate career!

Start Multiple Choice Practice Test
Start Flash Cards

Practice this question and more.

What is the substitute contract called when a new buyer shares the purchase price with the original buyer?

  1. A modification

  2. An amendment

  3. A novation

  4. An assignment

The correct answer is: A novation

A novation is the correct answer because it is a specific type of substitute contract where a new party steps in to replace one of the original parties in the existing contract. This is different from a modification or an amendment, which typically refer to changes made to the existing contract by both parties. An assignment, on the other hand, is when one party transfers their rights and obligations to another party, but the original party remains involved in the contract. In the scenario described in the question, a novation would be the most accurate term to describe the new buyer sharing the purchase price with the original buyer.

More Questions Like This