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Suman owes Pushpa ₹50,000 under a contract. Suman, Pushpa and Kusum agree that Pushpa will accept Kusum…

Section 62 gives effect to an agreed substitution of a new contract for the original contract. As in illustration (a), the original debt from Suman to Pushpa ends and the…

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Suman owes Pushpa ₹50,000 under a contract. Suman, Pushpa and Kusum agree that Pushpa will accept Kusum as debtor in place of Suman. What is the effect under the Indian Contract Act, 1872?

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Answer and explanation

Correct answer A

Section 62 gives effect to an agreed substitution of a new contract for the original contract.

As in illustration (a), the original debt from Suman to Pushpa ends and the substituted debt runs from Kusum to Pushpa.

Option feedback

Option A

All three agree to substitute Kusum for Suman as Pushpa's debtor. The old obligation ends under section 62.

Option B

Pushpa is the creditor in both arrangements. The change is the identity of her debtor.

Option C

The agreement replaces Suman rather than adding a second debtor. Section 62 discharges the original contract.

Option D

The agreed substitution discharges Suman and creates a debt from Kusum to Pushpa.

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