Final answer:
Novation is the correct answer where a new party takes over existing contractual duties from an original party, creating a new contract.
Step-by-step explanation:
The type of contract where a new party agrees to perform a duty that one of the original parties to a contract was already legally obligated to perform is known as novation. In novation, all parties involved must agree to the replacement of the original party with a new one, and it results in the discharge of the original contract. The new party takes on the responsibility to perform the contractual duties, which effectively creates a new contract. This is different from an assignment, where the original party may still retain some rights or obligations post-transfer.
Considering the options provided:
- a) Novation
- b) Assignment
- c) Executed contract
- d) Breach of contract
The correct answer is a) Novation.
The correct answer is a) Novation. Novation is a type of contract where a new party agrees to take over the obligations of one of the original parties. It essentially substitutes the original party with a new one, relieving the original party of their duty.
For example, let's say you have a contract with Company A to deliver a package. Company A then decides to transfer that obligation to Company B through novation. Now, Company B is responsible for delivering the package instead of Company A.