novation
noun · Novation
Novation or Schuldumschaffung for replacing an obligation with a new one, but German has no special novation doctrine, it is an ordinary Aufhebung plus Neubegründung by agreement, § 311 Abs. 1 BGB, and the real trap is security, accessory rights die with the old obligation, § 1252 BGB, where an Abtretung or Vertragsübernahme would carry them along.
Which translation, when
Why
Novation in the common-law sense extinguishes the old obligation and creates a new one, often to substitute a party, and German law can do this but does not treat it as a distinct doctrine, it is simply an Aufhebungsvertrag combined with a Neubegründung, agreed under § 311 Abs. 1 BGB, called Novation or Schuldumschaffung in the literature. Because the old obligation is extinguished, its accessory securities die with it, a Pfandrecht by § 1252 BGB and a Bürgschaft by its accessory nature, § 767 BGB, and § 418 BGB spells the same effect out for the assumption cases, which is precisely the danger the parties must plan around. The German alternatives preserve more, die Abtretung moves the claim together with its accessory rights, § 401 BGB, and die Vertragsübernahme moves an entire contractual position by three-party agreement, keeping the relationship and its security alive. So the choice is not stylistic, novation resets and drops the collateral, transfer preserves it, and rendering every novation as a neutral Übertragung hides which of the two actually happened. The word Novation is understood, but Neuerung, the literal machine offer, is not the term of art.
Typical mistakes
- Novation drops the securities, extinguishing the old obligation ends its accessory Bürgschaft and Pfandrecht, § 1252 BGB and § 767 BGB, so translating a security-preserving transfer as Novation can quietly release the collateral.
- German has no special novation doctrine, it is an Aufhebung plus Neubegründung, § 311 Abs. 1 BGB, so importing English novation formalities overstates what German law requires.
- Novation is not assignment, die Abtretung moves the claim and keeps its accessory rights, § 401 BGB, and die Vertragsübernahme moves the whole position, so the security-carrying transfers must not be labelled novation.
What matters
Loan-transfer mechanics turn on the securities: a novation resets the obligation and, with it, drops the accessory Bürgschaft and Pfandrecht, § 1252 BGB, while an Abtretung, § 401 BGB, or a Vertragsübernahme carries them to the new lender. The deal documented as a novation without re-taking security has released the collateral by accident.
What the machine misses
Novation comes back as Neuerung in machine output, a plain innovation word where German uses Novation or Schuldumschaffung, and worse, the securities question vanishes. Novation extinguishes the old obligation and its accessory Bürgschaft and Pfandrecht fall away, while an Abtretung or Vertragsübernahme would carry them, so a transfer mislabelled as novation can release the very collateral the lender relied on, and no neutral Übertragung in the translation warns of it.
Examples
| novation of the contract | die Novation des Vertrages |
| to novate the loan | das Darlehen novieren |
| novation agreement | der Novationsvertrag |
| by way of novation or assignment | durch Novation oder Abtretung |
More notes on these sections
misrepresentation arglistige Täuschung
assignment Abtretung
subrogation Forderungsübergang