![]() Now that the question arises what happens if the center of the contract isn’t changed but only minor changes are made. In other words, it means if the new contract changes the center of the contract or the basis of the first contract only then it’ll be considered Novation. it’s during this situation that the initial contract needn’t be performed”. In the supreme court case of Lata Construction v Dr Rameshchandra Ramniklal Shah, it was absolutely held that “there should be a whole substitution of a replacement contract. It was agreed among A, B and C that A would pay Rs 100 to C. If the parties are not changed then the fabric terms of the contract must be altered by the new contract because a mere variation of a number of the terms of a contract isn’t novation but alteration.Įxample: A owed Rs 100 to B, under contract. Novation of contract means replacement of an existing contract by another contract. ![]() It can also be terminated by agreement in any of the subsequent ways: ![]() Discharge by Agreement/Consent:Ī contract could also be discharged by the new agreement between like minded parties. Performance can also be,Ī) Actual performance b) Offer of performance or tender. Performance of contract is the most usual mode of its discharge. If just one of the several parties performs the promise, he alone is discharged. When the parties to a contract perform their shares of the guarantees, the contract is discharged. Performance is that the natural modes of discharge. ![]() Various modes of discharge Discharge by Performance: It is also enshrined in Section 62 of Indian Contract Act. While operation of law includes death, insolvency, etc. Act of parties may take different forms like performance, agreement, breach, etc. A contract may be discharged either by the acts of the parties of the operation of law. When the rights and obligations arising out of a contract are extinguished, the contract is said to be discharged. Discharge of contract means termination of the contractual relationship between the parties. ![]()
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