What is novation and what are its legal consequences?

NOVATION AS A DEFENSE AGAINST ENFORCEMENT OF THE ORIGINAL CONTRACT

Novation is the substitution of a new agreement between the same parties or the substitution of a new party on an existing agreement. Honeycutt v. Billingsley, 992 S.W.2d 570, 576 (Tex. App.-Houston [1st Dist.] 1999, pet. denied).

Where a novation occurs, only the new agreement may be enforced. Id. To establish a novation, the party raising the defense must prove: (1) the existence of a previous, valid obligation; (2) a mutual agreement of the parties to a new contract; (3) the extinguishment of the old contract; and (4) the validity of the new contract. RM Crowe Prop., 348 S.W.3d at 448 (citing Vickery v. Vickery, 999 S.W.2d 342, 356 (Tex. 1999)).

SOURCE: HOUSTON COURT OF APPEALS - 01-11-01034-CV – 2/21/2013 

CITES FOR NOVATION ELEMENTS FROM OLDER CASES

A novation is:

. . . the substitution of a new agreement between the same parties or the substitution of a new party on an existing agreement. See Hidalgo County v. Pate, 443 S.W.2d 80, 89 (Tex. Civ. App.-Corpus Christi 1969, writ ref'd n.r.e.). Therefore, only the new obligation may be enforced. Priem v. Shires, 697 S.W.2d 860, 864-65 (Tex. App.-Austin 1985, no writ). The elements of novation are: (1) a previous, valid obligation; (2) an agreement of the parties to a new contract; (3) the extinguishment of the old contract; and (4) the validity of the new contract. Mandell v. Hamman Oil [&] Ref. Co., 822 S.W.2d 153, 163 (Tex. App.-Houston [1st Dist.] 1991, writ denied).

Honeycutt v. Billingsley, 992 S.W.2d 570, 576 (Tex. App.-Houston [1st Dist.] 1999, pet. denied).

A novation is the substitution of a new agreement between the same parties or the substitution of a new party on an existing agreement. See Hidalgo County v. Pate, 443 S.W.2d 80, 89 (Tex. Civ.App.-Corpus Christi 1969, writ ref'd n.r.e.). Therefore, only the new obligation may be enforced. Priem v. Shires, 697 S.W.2d 860, 864-65 (Tex.App.-Austin 1985, no writ).

Novation is an affirmative defense. Mandell, 822 S.W.2d at 163. Therefore, the burden of proof "is on the party asserting it." See Starcrest Trust v. Berry, 926 S.W.2d 343, 353 (Tex.App.-Austin 1996, no writ); see also Schwab v. Schlumberger Well Surveying Corp., 145 Tex. 379, 198 S.W.2d 79, 82 (1946).