2009 California Civil Code - Section 1530-1533 :: Chapter 5. Novation

SECTION 1530-1533

1530.  Novation is the substitution of a new obligation for an
existing one.

1531.  Novation is made:
   1. By the substitution of a new obligation between the same
parties, with intent to extinguish the old obligation;
   2. By the substitution of a new debtor in place of the old one,
with intent to release the latter; or,
   3. By the substitution of a new creditor in place of the old one,
with intent to transfer the rights of the latter to the former.

1532.  Novation is made by contract, and is subject to all the rules
concerning contracts in general.

[1533.]  Section Fifteen Hundred and Thirty-three. When the
obligation of a third person, or an order upon such person is
accepted in satisfaction, the creditor may rescind such (such)
acceptance if the debtor prevents such person from complying with the
order, or from fulfilling the obligation; or if, at the time the
obligation or order is received, such person is insolvent, and this
fact is unknown to the creditor, or if, before the creditor can with
reasonable diligence present the order to the person upon whom it is
given, he becomes insolvent.

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