What is the difference between assignment and novation of a contract?

Assignment transfers one party's rights and obligations under a contract to a third party, but the original party remains secondarily liable if the assignee fails to perform. Novation replaces one party entirely with a new party, releasing the original party from all obligations with the consent of all parties involved. For example, if a buyer assigns a purchase contract to an investor, the original buyer remains liable if the investor defaults. If all three parties agree to a novation, the original buyer is completely released.