Section 62 Indian Contract Act 1872
Section 62 of the Indian Contract Act 1872 is about Effect of novation, rescission, and alteration of contract. It is under “Contracts which need not be performed” of CHAPTER IV of the Act. CHAPTER IV is titled OF THE PERFORMANCE OF CONTRACTS.
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 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.
See also:
Section 61 Indian Contract Act 1872 (Application of payment where neither party appropriates)
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