Question

    In a scenario where the parties to an existing contract

    mutually agree to either substitute it with a new contract, rescind it, or modify its terms, what is the status of the original contract in terms of its performance obligations?
    A The original contract remains enforceable, and its terms must be adhered to unless officially terminated by judicial decree Correct Answer Incorrect Answer
    B The original contract becomes void, but its performance obligations are deferred until the new contract is fully executed Correct Answer Incorrect Answer
    C The original contract ceases to be enforceable, and its performance obligations are no longer required Correct Answer Incorrect Answer
    D The original contract's performance obligations are suspended until the parties provide formal written notice of rescission or substitution Correct Answer Incorrect Answer
    E The original contract must still be performed in accordance with its terms until the new contract is registered with the relevant authorities. Correct Answer Incorrect Answer

    Solution

    Contract Act Section 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.

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