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Under Section 62 of the Indian Contract Act, 1872, if the parties to a contract agree to substitute a…

Section 62 of the Indian Contract Act, 1872 ('Effect of novation, rescission, and alteration of contract') provides: 'If the parties to a contract agree to substitute a new…

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Under Section 62 of the Indian Contract Act, 1872, if the parties to a contract agree to substitute a new contract for it:

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Answer and explanation

Correct answer B

Section 62 of the Indian Contract Act, 1872 ('Effect of novation, rescission, and alteration of contract') provides: '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.' By novation, the original contract is discharged and extinguished by mutual consent, and the rights and obligations of the parties are governed solely by the substituted contract.

Option feedback

Option A

Valid substitution under section 62 discharges the original contract. The parties have no election to enforce it.

Option B

Correct. Under Section 62 of the Indian Contract Act, 1872, if the parties to a contract agree to substitute a new contract for it (novation), the original contract is discharged and need not be performed.

Option C

Incorrect. Substitution of a new contract extinguishes the obligation to perform the original contract under Section 62.

Option D

Section 62 provides the result: on a valid substitution the original contract need not be performed.

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