Effect of novation, rescission, and alteration of contract
Chapter 5: Of the performance of contracts
If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract, need not be performed.
Illustrations.
(a) A owes money to B under a contract. It is agreed between A, B and C that B shall thenceforth accept C as his debtor, instead of A. The old debt of A to B is at an end, and a new debt from C to B has been contracted.
(b) A owes B 10,000 rupees. A enters into an arrangement with B and gives B a mortgage of his (A‟s) estate for 5,000 rupees in place of the debt of 10,000 rupees. This is a new contract and extinguishes the old.
(c) A owes B 1,000 rupees under a contract. B owes C 1,000 rupees B orders A to credit C with 1,000 rupees in his books, but C does not assent to the arrangement. B still owes C 1,000 rupees, and no new contract has been entered into.
The Indian Contract Act, 1872 (Act No. 9 of 1872). From the updated text on India Code, with later amendments. Being checked against the official copy; amendment notes are not shown yet.
Related sections
- 59Application of payment where debt to be discharged is indicated
- 60Application of payment where debt to be discharged is not indicated
- 61Application of payment where neither party appropriates
- 63Promisee may dispense with or remit performance of promise
- 64Consequences of rescission of voidable contract
- 65Obligation of person who has received advantage under void agreement, or contract that becomes void