Discharge by Agreement and Novation (Section 62)
Discharge by Agreement and Novation (Section 62) Sections 62 and 63 deal with contracts in which the obligation of the parties to it may end by the consent of the parties. Novation Novation means substitution of an existing contract with a new one. When, by an agreement between the parties to a contract, a new contract replaces an existing one, the already existing contract is thereby discharged, and in its place the obligation of the parties in respect of the new contract comes into existence. Section 62 contains the following provision in this regard: "Effect of novation, rescission and alteration of contract. 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." Novation is of two kinds: (1) Novation by change in the terms of the contract, and (2) Novation by change in the parties to the contract. (i) Change in the terms of the contract The parties to a...