What legal process allows parties to replace a cancelled contract with a new one?

The correct answer is novation. Novation is a legal process that enables the replacement of an existing contract with a new one, effectively transferring the obligations and rights under the original agreement to a new party or restructuring the terms entirely. In this process, all parties involved must agree to the new contract, thus extinguishing the original contract and establishing a new legal relationship.

This mechanism ensures that the parties are fully aware of and consent to the changes being made, preserving the integrity and enforceability of the contractual agreement. Since termination ends the contract without a replacement, and amendment or modification simply alters the terms of the existing contract rather than creating a new one, novation is the precise term that describes the complete replacement of a contract.