What is the exam-ready distinction?
| Roadmap post | 201 of 500 |
|---|---|
| Official syllabus topic | Contracts: Assignment, Delegation, Substitution, and Liability |
| Official PSI area | Contracts |
| Published weight | 19% of the 100-question national portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
| Content checked through | August 2, 2026 |
The Rule
PSI publishes a weight for the complete official area, not a guaranteed count for this individual comparison. Use the source, document, actor, event, and timing stated in the question before applying a memorized definition.
Side-by-side comparison
Read across each row. The terms are deliberately compared on identical dimensions so the difference remains clear when the exam hides the vocabulary inside a scenario.
| Decision dimension | Assignment | Novation |
|---|---|---|
| Core effect | Transfers a contractual right; related duties may be delegated when permitted | Substitutes a new party or obligation through a new agreement |
| Consent | Depends on the contract and law; assignment can be restricted | Requires agreement of the parties whose rights and duties change |
| Original party | Usually remains liable for delegated performance unless released | Is released when a valid novation replaces that party |
| Exam clue | Transfer without an express release | Substitution plus consent and release |
Decision rule
Georgia-specific distinction
Worked example
Scenario. A buyer assigns purchase rights to the buyer's LLC under a contract that permits assignment. The seller never agrees to release the buyer.
Reason it through. The rights moved to the LLC, but the facts contain no new agreement releasing and replacing the original buyer.
Answer. This is an assignment, and the original buyer may remain liable rather than receiving a novation release.
Common exam traps
- Calling every transfer a novation
- Ignoring an anti-assignment clause
- Assuming delegation erases liability
- Treating assignment of rights and delegation of duties as identical
Original practice questions with detailed explanations
These are original instructional questions mapped to the July 1, 2026 PSI outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.
Question 1Which transaction substitutes a new party and releases the original party?
- A. An assignment without release
- B. A valid novation
- C. A delegation alone
- D. A counteroffer
Show answer and explanation →
Answer: B. A valid novation
A valid novation is correct. An assignment transfers contractual rights, while a delegation transfers duties. The original obligor normally remains responsible unless the other party agrees to a release. A novation is a new agreement that substitutes a party or obligation and releases the one being replaced. Transfer alone is not novation. The remaining options, An assignment without release; A delegation alone; A counteroffer, do not match the controlling category or fact.
Question 2A buyer assigns purchase rights to the buyer's LLC under a contract that permits assignment. The seller never agrees to release the buyer.
- A. It is automatically a novation because a new name appears.
- B. The original buyer is released by the assignment alone.
- C. This is an assignment, and the original buyer may remain liable rather than receiving a novation release.
- D. It is a rescission because the buyer changed entities.
Show answer and explanation →
Answer: C. This is an assignment, and the original buyer may remain liable rather than receiving a novation release.
The rights moved to the LLC, but the facts contain no new agreement releasing and replacing the original buyer. The supported conclusion is: This is an assignment, and the original buyer may remain liable rather than receiving a novation release. The other choices replace those controlling facts with a neighboring concept or an unsupported absolute rule.
Question 3What should a candidate identify first when comparing Assignment Versus Novation?
- A. The option with the longest definition, without classifying the facts.
- B. A memorized Georgia rule, even when the question asks for a national concept.
- C. The answer that sounds most favorable to one party, regardless of the document or event.
- D. Identify what moved, whose consent was required, and whether the original party was expressly released from liability.
Show answer and explanation →
Answer: D. Identify what moved, whose consent was required, and whether the original party was expressly released from liability.
Identify what moved, whose consent was required, and whether the original party was expressly released from liability. That sequence identifies the legal category before the label. Definition length ignores the facts, jurisdiction confusion answers a different question, and sympathy cannot replace the document, event, calculation, or governing rule.
Mastery tracking
Mark this distinction mastered only when every statement is true.
- Define every compared term without using the other term as the definition.
- Rebuild the comparison table from memory.
- State the decision rule and Georgia distinction without notes.
- Solve the worked example after changing one controlling fact.
- Explain why every trap and distractor is tempting but wrong.
- Answer all three original questions correctly in mixed practice on a later day.
Recommended next lesson
Continue with Rescission Versus Cancellation Versus Termination. Continue to roadmap comparison 202.
Return to the complete exam-concept library or the Contracts hub.