Source : Webster's Revised Unabridged Dictionary (1913)

Novation \No*va"tion\, n. [L. novatio; novus new: cf. F.
   novation.]
   1. Innovation. [Obs.]

            I shall easily grant that novations in religion are
            a main cause of distempers in commonwealths. --Laud.

   2. (Law) A substitution of a new debt for an old one; also,
      the remodeling of an old obligation.

Source : WordNet®

novation
     n : (law) the replacement of one obligation by another by mutual
         agreement of both parties; usually the replacement of one
         of the original parties to a contract with the consent of
         the remaining party