• A substituted contract differs from a novation (as “novation” is traditionally defined) in that the latter requires the substitution for the original obligor of a third person not a party to the original agreement; when the obligee accepts the third party, the agreement is immediately discharged. In contrast to both substituted contract and novation, an executory accord does not immediately discharge an obligation; rather, the obligation is discharged on performance, often by a third person, rather than the original obligor. Cf. NOVATION; ACCORD(2). [Cases: Accord and Satisfaction 1; Novation 1, 4. C.J.S. Accord and Satisfaction §§ 2–17, 25–33; Novation §§ 2–4, 9–16, 29.]
substituted contract
A contract made between parties to an earlier contract so that the new one takes the place of and discharges the earlier one.
