When a buyer enters into a new loan agreement replacing the original between the seller and lender, what legal term describes this?

In the context of a new loan agreement replacing the original between a seller and a lender, the term that accurately describes this action is novation. Novation refers to the process by which a new party is substituted for an original party in a contract, thereby discharging the original party of its obligations under the contract. In this case, the buyer steps into the shoes of the seller, creating a new agreement with the lender, which effectively replaces the previous agreement and transfers the obligations and rights from the seller to the buyer.

This term is particularly important in scenarios involving loans or contracts, as it ensures that all parties involved agree to the new terms. The necessity of mutual consent is a crucial aspect of novation since it mitigates potential disputes over responsibilities and obligations under the newly formed agreement.