Novations and Releases

Civil Code Division 3, Part 1, Title 4 deals with the extinction of obligations. Chapter 5 deals with novation.

Section 1530 provides that novation is the substitution of a new obligation for an existing one.

Section 1531 explains that novation is made in one of three specified manners.

Section 1532 says that novation is made by contract, and is subject to all the rules concerning contracts in general.

Section 1533 provides that, when the obligation of a third person, or an order upon the person is accepted in satisfaction, the creditor may rescind acceptance if the debtor prevents the person from complying with the order, or from fulfilling the obligation.

Chapter 6 deals with releases.

Section 1541 provides an obligation is extinguished by a release given to the debtor or the released party by the creditor or releasing party, upon a new consideration, or in writing, with or without new consideration.

Section 1542 states that a general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

Section 1542.1 explains that a provider of health care, or its officers, employees, agents, or subcontractors, must release the state and its officers, employees, and agents, from any claim arising from the defense of the provider of health care by the Attorney General, or other legal counsel provided by the state.

Section 1543 provides that a release of one of two or more joint debtors does not extinguish the obligations of any of the others, unless they are mere guarantors; nor does it affect their right to contribution from him or her, except as provided.