Malaysia legislation
Section 63
Section 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.
Promisee may dispense with or remit performance of promise