Indian Contract Act — Section 62

Effect of novation, rescission, and alteration of contract.—If the parties to a contract agree to

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 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.

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Judgments citing Section 62

Text reproduced from the public statutes on which the corpus is built. Verify against the official Gazette before relying on it. This is statute reference, not legal advice.