What process substitutes an assignee and obligor under a contract?

Novation is the correct answer because it refers to a process in which a legal obligation or contract is replaced with a new one, effectively substituting both the original party (the obligor) and the party to whom obligations are owing (the assignee) with new parties. This means that, after novation, the new parties take on the rights and duties originally held by the old parties, and the old parties are released from any liability related to the contract.

This concept is crucial in contract law, as it allows for the transfer of contract rights and obligations while ensuring that all parties agree to the changes, thereby preserving the integrity of the contract. In contrast, delegation only involves transferring duties from one party to another without the need for a new party to replace the original creditor or party to the contract. While assignment can transfer rights, it does not change the obligations of the original parties without the need for an additional agreement.