Image source: No Attribution Required.
Parties who want to form a new novated lease must be able to legally create a contract. The creditor must be able to dispose of his previous claim. The debtor must be able to bind himself to the new claim. In addition to these requirements, additional conditions are required.
The difference between the two obligations must relate to one of the constituent elements of the obligation. There must be a modification of the object and the cause of the obligation, the person of the debtor, the person of the creditor, or the terms of the obligation. A novated lease must bring something new, otherwise the transaction would be merely the recognition of a pre-existing debt.
For its part, the new Stratton Finance Novated Lease Calculator must be valid, failing that condition requires that the first lease will not be ended. The obligation differs from an assignment of receivables because it results in the appearance of a new receivable distinct from the former. Moreover, the debtor must consent.
This operation differs from the assignment of debt. Sometimes the transaction involves the intervention of the debtor, sometimes the new debtor will be obliged to the creditor. With expromission, the consent of the creditor is indispensable. The former debtor will be released.
In this case, the new novated lease obligation shall be created and the original obligation shall be ended. The new debtor will be obliged to the creditor. The new debtor shall be obliged to the creditor at the request or at the order of the former debtor. In this case, the new obligation may differ from the former.
This new lease implies that the debtor engages for the same purpose, but in a different capacity. The introduction or deletion of a modality entails a new novated lease because it is a condition that affects the obligation itself. It implies an extinctive effect, implying a renunciation of the creditor to his original claim. The will to end the old obligation must not be equivocal.
Novation is an agreement between a creditor and a debtor of an obligation to end that obligation and create another. Renunciation is not presumed, it is an abdicative act. Similarly, sometimes the parties have introduced a new method of settlement. This is the case where the parties simply wish to adjust the pre-existing obligation. If the intention to form a new novated lease does not appear, it will be assumed that there has been no novation.
There can be no creation if the old obligation does not go away. Since the first obligation is ended, its characteristics and accessories are not included in the second obligation. It ends the old obligation as if a payment had occurred and replaces it with a new one.
The old obligation is ended only because a new obligation is created. This double extinctive and creative effect implies a discontinuity. The exceptions that the debtor could claim against the former claim are not enforceable to the new one. There is an unenforceability of exceptions that will strengthen the rights of the creditor. The accessories and guarantees are not included in the new claim, unless there has been a special agreement and the consent of those who provide the guarantees.