Section 62Effect of novation, rescission and alteration of contract

s. 62

62. 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. 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 Taka. A enters into an arrangement with B, and gives B a mortgage of his (A's) estate for 5,000 Taka, in place of the debt of 10,000 Taka. This is a new contract and extinguishes the old. (c) A owes B 1,000 Taka under a contract. B owes C 1,000 Taka. B orders A to credit C with 1,000 Taka in his books, but C does not assent to the arrangement. B still owes C 1,000 Taka, and no new contract has been entered into.