Section 62 - Effect of novation, rescission and alteration of
contract : Indian Contract Act
What is Effect of novation, rescission and alteration of contract? Section 62 of Indian Contract Act
Section 62 of Indian Contract Act 1872 : "Effect of novation,
rescission and alteration of contract"
62. 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.
(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.