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Author Topic: Novation: the settlement method to extinguish the old debt  (Read 10730 times)
fraudfighter
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« on: December 08, 2006, 12:48:39 PM »

Novation

“A novation is a mutual agreement between the parties concerned for the discharge of a valid existing obligation by the substitution of a new valid obligation.”
Bailey v. Inman, 140 So. 783, Fla. 1932;
Murphy v. Green, 135 So. 531, Fla. 1931;
Miami Nat. Bank v. Forecast Const. Corp., 366 So.2d 1202, Fla. App. 3 Dist., 1979.

“It ordinarily consists of two stipulations, one to extinguish the old debt and the other to substitute a new one it its place.”
Moses v. Woodward, 140 So. 651, Fla. 1932, rehearing granted 141 So. 117 (1932), and on rehearing 147 So. 690 (1933)

“In order to operate as a novation, a contract made to take the place of a prior obligation must be intended as such and agreed to by all interested parties.”
Fontainbleau Hotel Corp. v. Crossman, 323 F.2d 938, C.A. 5, 1963.
Ades v. Bank of Montreal, 542 So.2d 1013, Fla. App. 3 Dist. 1989.
S.N.W. Corp. v. Hauser, 461 So.2d 188, Fla. App. 4 Dist. 1984.
Amoedo v. Socarras, 311 So.2d 830, Fla. App. 3 Dist. 1975.

“Where a novation is the substitution of a new contract between the parties with the intention of extinguishing the old contract, the original obligor is freed from the obligation. However, the contractual right must be intentionally relinquished, waived, or replaced by another right or another obligor under the same right.”
Fontainbleau Hotel Corp. v. Crossman, 323 F.2d 937, C.A. 5, 1963.
Bowleg v. Bowe, 502 So.2d 71, Fla. App. 3 Dist. 1987.

“Where a new executory promise itself is the thing accepted in consideration of the discharge of a former one, it is sufficient, and the fact that the former contract has not been performed will not destroy or alter the effect of the novation nor will it operate to restore the extinguished obligation.”
U.S. v. Nill, 518 F.2d 793, C.A. 5, 1975.
Murphy v. Green, 135 So. 531, Fla. 1931.
 
“An important element of every novation is a new contract to which all parties concerned must consent.”
Orlando Orange Groves Co. v. Hale, 161 So. 284. Fla. 1935.
Burge v. Maund, 63 So. 708, Fla. 1913.
International Granite & Marble Corp. v. City Nat. Bank of Miami, 360 So.2d 155, Fla. App. 3 Dist. 1978.

“It is necessary to a novation that the parties agree that the second contract or agreement take the place of the first contract or agreement.”
Easley v. Allen, 367 F.2d 361, C.A. 5, 1966.
Sink v. Abitibi-Price Sales Corp., 602 So.2d 1313, Fla. App. 4 Dist. 1992.
Reeves v. Don L. Tullis & Associates, Inc., 305 So.2d 813, Fla. App. 1 Dist. 1975.
United Bonding Ins. Co. v. Southeast Regional Builders, Inc. 236 So.2d 460, Fla. App. 1 Dist. 1970.

“An important element of a novation is that the original debt of obligation must be extinguished.”
Hutton v. Perry, 495 So.2d 876, Fla. App. 5 Dist. 1986.
United Bonding Ins. Co. v. Southeast Regional Builders, Inc. 236 So.2d 460, Fla. App. 1 Dist. 1970.

“The rule is not satisfied by the mere substitution of one paper for another or one evidence of a debt for another, but only by the substitution of a new obligation for another with the intent to extinguish the old.”
McAdow v. Smith 172 So. 448, Fla. !937.
Marianna Lime Products Co. v. McKay, 147 So. 264, Fla. 1933.
Travers v. Stevens, 145 So. 851, Fla. 1933.
Bailey v. Inman, 140 So. 783, Fla. 1932
Murphy v. Green, 135 So. 531, Fla. 1931
Donegan v. Baker & Holmes Co., 74 So. 202, Fla. 1917.
Sans Souci v. Division of Florida Land Sales and Condominiums, Dept. of Business Regulations, 421 So.2d 623, Fla. App. 1 Dist. 1982.


“Because a novation takes place only by agreement, depending on the intention of the parties at the time of its making, the novation becomes largely a matter of proof and not of law.”
Murphy v. Green, 135 So. 531, Fla. 1931;
McKittrick Dry Goods Co. v. Goodman, 45 So. 995, Fla. 1908.

“A party pleading novation as an affirmative defense has the burden of proving it by a clear preponderance of the evidence.”
Travis v. Central Sur. and Ins. Corp. C.C.A. 5, 1941.

 “A party pleading novation as an affirmative defense has the burden of proving it by a clear preponderance of the evidence, showing the existence of an agreement by the parties to cancel and extinguish the first debt or obligation and in agreement that the second contract or agreement will take the place of the first obligation.”
Miami Nat. Bank v. Forecast Const. Corp., 366 So.2d 1202, Fla. App. 3 Dist., 1979.
Babe, Inc. v. Baby’s Formula Service, Inc. 165 So.2d 795, Fla. App. 3 Dist. 1964.

“The construction of the new agreement is a matter of law where, by its terms, the new agreement superseded the old agreement, rendered the old agreement null and void, and the new agreement is a complete binding contract on its face.”
On-Site Development Corp v. Riley, 564 So.2d 201, Fla. App. 5 Dist. 1990.

End of Fla. Jur. 2d

“To establish a novation, a party to contract must show (1) existence of previous valid contract, (2) agreement to make new contract, (3) intent to extinguish original contract and obligation, and (4) validity of new contract.”
“Intention of the parties controls whether novation occurs.”
North American Products Corp. v. Moore, M.D. Fla. 2002, 196 F.Supp.2d 1217.

“While novation is well-recognized, its validity depends on whether new agreement was meant to discharge all valid, existing obligations under the old contract and did, in fact, replace old contract.”
In re Health America Medical Group, Inc. Bkrtcy., M.D. Fla. 293 B.R. 799, 2003.

“A “novation” is a mutual agreement between the parties for the discharge of a vlaid existing obligation by the substitution of a new valid obligation.”
There are four essential elements necessary to form a substitute contract or novation: (1) the existence of a previously valid contract; (2) the agreement of the parties to cancel and extinguish the first contract; (3) the agreement of the parties that the second contract takes the place of the first; and (4) the validity of the new contract.”
Holiday Square Owners Ass’n., Inc. v. Tsetsenis, 820 So.2d 450, Fla. App. 5 Dist. 2002.

End of pocket parts Novation.


Fla. D. 2d Novation.
“”Novation” is a mutual agreement between parties concerned for discharge of vlaid existing obligation by substitution of a new valid obligation on part of the debtor; novation does not result from mere substitution of one paper writing for another or one evidence of debt for another, but only by substitution of the new obligation for another with intent to extinguish the old one.”
U.S. v. Nill. 518 F.2d 793, C.A. 5, Fla. 1975.

“”Novation” is the substitution of a new contract between the same parties with intention of extinguishing the old contract.”
Fontainbleau Hotel Corp. v. Crossman, 323 F.2d 937, C.A. 5, Fla. 1963.

“Elements of novation are existence of previously valid contract, agreement to make new contract, intent to extinguish original contractual obligations, and validity of new contract.”
In re River Oaks Inv. Corp., Bkrtcy. S.D. Fla., 152 B.R. 684, 1993.

“To effectuate a novation, explicit language is required in the agreement showing an intent to make such a substitution; in the absence of such express language, the novation is not to be assumed.”
In re Schools, Bkrtcy. S.D. Fla., 14 B.R. 953, vacated and remanded Greenberg v. Schools, 21 B.R. 1011, affirmed 711 F.2d 152, 1981.

“”Novation” is mutual agreement between the parties concerned for discharge of valid existing obligation by substitution of new valid obligation.”
Electro-Protective Corp. v. Creative Jewelry by Kempf, Inc., 513 So.2d 190, Fla. App. 5 Dist., 1987.

“Novation, like any other contract, must be supported by valid consideration.”
U.S. Home Acceptance Corp. v. Kelly Park Hills, Inc. 542 So.2d 463, Fla. App. 5 Sit. 1989.

“Elements of novation are existence of previously valid contract, agreement to make new contract, intent to extinguish original contractual obligation, and validity of new contract.”
Brown v. Kelly, 545 So.2d 518, Fla. App. 5 Dist., 1989.


“Discharge of existing obligation as consideration.”

“Novation is mutual agreement between parties concerned for discharge of valid existing obligation by substitution of a new valid obligation.”
Ades v. Bank of Montreal, 542 So.2d 1013, review denied 551 So.2d 460, Fla. App. 3 Dist. 1989.

“Agreement to pay in installments on a debt which was already due and owing could not, without more, constitute a novation agreement because the original debt was not thereby extinguished and no consideration was given to creditor for installment arrangement.”
“Creditor’s claimed forbearance to sue debtor on debt which is already due and owing cannot constitute consideration to the creditor for asserted novation agreement when the debtor agrees to pay debt in installments.”
South Miami Hosp. Foundation v. Hernandez, 455 So.2d 1103.

“Two of the essential elements which must be present in order for novation to exist are an agreement by the parties to cancel and extinguish the first debt or obligation, and agreement of the parties that the second contract or agreement takes the place of the first obligation.”
Miami Nat. Bank v. Forecast Const. Corp., 366 So.2d 1202, Fla. App. 3 Dist. 1979.

“Whether novation occurred depends on whether parties intended new agreement to substitute for prior agreement.”
In re United Display & Box, Inc., Bkrtcy. M.D. Fla., 198 B.R. 829, 1996.

“Although subsequent security agreement perhaps altered terms or original obligation, it did not operate as cancellation of original note as matter of law, and thus maker did not have novation defense to suit on original note.”
Arrigoni v. Ring Power Corp., 529 So.2d 803, Fla. App. 1 Dist. 1988.

“Indication of intent of the parties to replace the former agreement.”
“Novation is not satisfied by the substitution of one paper for another or one evidence of a debt for another, but only by the substitution of a new obligation for another with intent to extinguish the old.”
Taines v. Capital City First Nat. Bank, 344 So.2d 273, certiorari denied 355 So.2d 517, Fla. App. 1 Dist. 1977.

“Clear and definite showing of intent required to establish novation can be evidenced by facts, circumstances, and conduct of the parties.”
In re United Display & Box, Inc., Bkrtcy. M.D. Fla. 198 B.R. 829, 1996.
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SHRINKINGVIOLET333
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« Reply #1 on: March 31, 2010, 02:33:25 PM »

This information is awesome. Is there any newer case law for Novation in Florida?
That would even bring more credibility if the novation was done concisely and
carefully. Thank you for the information.
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I am learning the hard way, so don't listen to seriously to what
I have to say, as it isn't legal advice. Go see a lawyer for that.
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