Which principle is central to a novation process?

The central principle of a novation process is the substitution of one party for another in a contract. Novation is a legal mechanism that allows for the transfer of contractual obligations and rights from one party to a new party, effectively replacing the original party. This means that the original party is released from all future obligations under the contract, and the new party takes on those obligations.

In a novation, the consent of all parties involved is required. The new party agrees to the existing contract terms, and the original contract is discharged. This is not simply an assignment of rights, where one party transfers benefits to another, but rather a complete replacement of one party in the agreement.

For instance, in a business transaction when one party wants to exit a contract, a novation allows a new party to step in and take their place, ensuring that the contract continues without interruption. This ensures that the obligations under the agreement are still met while allowing for changes in the parties involved.