Innovation vs. Novation — What's the Difference?

A new method, idea, or product.

Agreement to substitute a new for an old debt.

The act of innovating; introducing new concepts.

Discharge of a contract by mutual agreement.

Implementation of creative ideas to generate value.

A legal mechanism to continue performance under a new party.

A new device or process developed by experimentation.

Renewal of a legal obligation.

A change that creates a new dimension of performance.

The act of replacing an obligation with a new one.

Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services. ISO TC 279 on innovation management proposes in the standards, ISO 56000:2020 to define innovation as "a new or changed entity creating or redistributing value".

Novation, in contract law and business law, is the act of – replacing an obligation to perform with another obligation; or adding an obligation to perform; or replacing a party to an agreement with a new party.In international law, novation is the acquisition of territory by a sovereign state through "the gradual transformation of a right in territorio alieno [in foreign territory] into full sovereignty without any formal and unequivocal instrument to that effect intervening".

The action or process of innovating

The substitution of a new contract for a previous contract, or the substitution of a new party for a previous party in a contract, so that the previous obligation is considered discharged or the previous obligor released.

The act of introducing something new.

(legal) Replacement of a contract with one or more new contracts, in particular in financial markets the replacement of a contract between a particular buyer and seller with contracts between the clearing house and each party.

Something newly introduced.

(legal) A new contract between the original contracting parties whereby the first obligation is extinguished and a new obligation is substituted.

The act of innovating; the introduction of something new, in customs, rites, etc.

Innovation.

A change effected by innovating; a change in customs

A substitution of a new debt for an old one; also, the remodeling of an old obligation; debt restructuring.

Something new, and contrary to established customs, manners, or rites.

(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

A newly formed shoot, or the annually produced addition to the stems of many mosses.

The act of innovating; introduction of something new, in customs, rites, commercial products, etc.

A change effected by innovating; a change in customs; something new, and contrary to established customs, manners, or rites.

A newly formed shoot, or the annually produced addition to the stems of many mosses.

A creation (a new device or process) resulting from study and experimentation

The creation of something in the mind

The act of starting something for the first time; introducing something new;

Novation is common in various contracts but is particularly prevalent in industries where long-term projects and multiple parties are involved, such as construction or corporate restructuring.

Yes, innovative changes may prompt a review or update of contracts but do not inherently replace them.

Innovation can significantly enhance a company's competitiveness by introducing efficiencies or new products that better meet consumer demands.

All parties involved in the original agreement must consent to the novation, which replaces the existing obligations with new ones.

Yes, innovation can also occur in processes, services, or business models, not just in technology.

Innovation refers to the creation and adoption of new ideas or methods, while novation involves legally replacing an old obligation with a new one.

Innovation often requires investment in research and development, whereas novation might incur legal costs but not necessarily significant financial investment.

Novation releases one party from obligations and introduces another, potentially altering the balance of responsibilities and rights.

Companies opt for novation to adjust to changes in business ownership, operational needs, or to reflect new strategic partnerships.

Innovation carries risks including failure of the new idea, financial losses, and disruption of current processes.