A novation occurs when

one party is substituted for another party of an agreement (to which all parties agree on the substitution, reliving the substituted party from performing

a unilateral contract is turned into a bilateral contract

the parties agree in advance to the amount of damages that will be paid if a party breaches the contract

a legal remedy is inadequate so a equitable remedy, like reformation of the contract, is the only fair alternative.

FedEx promises to deliver Fred's package to his customer Jim, overnight. Jim needs the package because it has the last part Jim needs to build his robot for Intel. Jim is under contract with Intel to complete the robot tomorrow, or else Jim has to pay liquidated damages of $500 for every day the robot is late (Intel plans to pay Jim about $50,000 for the completed robot). There is nothing in the agreement between Fred and FedEx limiting FedEx's liability for failing to deliver the package on time. The package is delivered one day late, so Jim is delayed by one day in getting the robot to Intel-and has to pay Intel $500. It cost FedEx charged Fred $50 to deliver the package. What is FedEx's $ liability for breaching the delivery contract (and failing to deliver overnight)?

$50, the fee charged for the delivery

$500, the lost suffered by Jim as long as the loss suffered by Jim was foreseeable

Nothing, because they eventually delivered the package.

Somewhere around $50,000 because FedEx was guilty of false advertising.