63. 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.

(a)

A owes money to B under a contract. It is agreed between A, B and C that

B shall henceforth 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 RM10,000. A enters into an arrangement with B, and gives B a mortgage of his (A’s) estate for RM5,000 in place of the debt of RM10,000.

This is a new contract and extinguishes the old.

(c)

A owes B RM1,000 under a contract. B owes C RM1,000. B orders A to credit C with RM1,000 in his books, but C does not assent to the agreement. B still owes C RM 1,000, and no new contract has been entered into.

Report

Read on from s 64

Part VI

Of Certain Relations Resembling Those Created by Contract

Read on from Part VI

Part VII

Of the Consequences of Breach of Contract

Read on from Part VII

Part VIII

Of Indemnity and Guarantee

Read on from Part VIII

Part IX

Of Bailment

Read on from Part IX

Part X

Read on from Part X