When an existing contract is replaced with a new one, this process is called what?

When an existing contract is replaced with a new one, the process is referred to as novation. Novation involves the substitution of a new contract for an old one, effectively canceling the original contract and fulfilling any obligations under the new contract. This process typically requires the consent of all parties involved, ensuring that the new agreement is legally binding and that all parties acknowledge the replacement of the original terms.

In contrast, modification refers to making changes or adjustments to the existing contract without completely substituting it with a new one. Amendment is a term used to denote small changes or additions made to the original document, but it does not signify the complete replacement of the contract. Substitution is a more general term and does not specifically apply to the legal context of contract law as novation does. Therefore, novation is the most precise term that accurately describes this scenario.