Question

    A contract is discharged by novation which means

    the__________________
    A Change in one or more terms of the contract Correct Answer Incorrect Answer
    B Substitution of existing contract for a new one Correct Answer Incorrect Answer
    C Change in one or more parties of the contract Correct Answer Incorrect Answer
    D Both B & C Correct Answer Incorrect Answer
    E Either b or c Correct Answer Incorrect Answer

    Solution

    A contract can be discharged either by agreement or by a breach. Novation is one way to discharge a contract by agreement and section 62 of the India Contract, 1872 Act gives expression to the doctrine of Novation. The substitution or replacement of an old contract with a new one is termed as Novation. It takes place with the consent and agreement of both the parties to a contract thus with the creation of new contractual obligations, the old ones are discharged. The doctrine of Novation exists to give expression to the concept that parties to a contract should be competent to add, subtract or vary the terms of the contract before its breach with the help of a new contract.

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