In which of the following methods, a contract is said to be discharged by mutual consent?

A. Novation

B. Recission

C. Remission

D. Alteration

E. Accord and Satisfaction

Choose the correct answer from the options given below: 

This question was previously asked in
UGC NET Paper 2: Commerce 4th March 2023 Shift 2
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  1. A, B and E only
  2. B, C and D only
  3. A, B, C and D only
  4. A, B, C, D and E

Answer (Detailed Solution Below)

Option 4 : A, B, C, D and E
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UGC NET Paper 1: Held on 21st August 2024 Shift 1
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Detailed Solution

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The correct answer is A, B, C, D and E.

Key Points

  • Novation:
    • Novation is a method to discharge a contract by mutual consent, where an existing contract is replaced by a new one, either between the same parties or involving a third party.
    • The original contract is extinguished and the new one takes its place.
  • Recission:
    • Recission is, indeed, a method of discharging a contract by mutual consent where all parties agree to cancel or terminate it.
    • When a contract is rescinded, it is effectively null and void, and parties to the contract are relieved of their respective obligations.
  • Remission:
    • Remission involves the acceptance by the creditor of a lesser fulfillment than what is rightfully theirs from the debtor under the contract.
    • While it was initially excluded from the discussion because it is typically seen as a one-sided act, it can be achieved by mutual consent, and in this context, it discharges the contract.
  • Alteration:
    • Alteration of a contract involves changing the terms of the agreement.
    • While alterations can sometimes occur unilaterally or be imposed by one party without the consent of the other, a mutual agreement to alter the contract's terms can result in the discharge of the original contract in favor of the newly formed one.
  • Accord and Satisfaction:
    • Accord and satisfaction is a situation in which parties to a contractual dispute agree (accord) to accept some alternative form of satisfaction to resolve the dispute.
    • The execution of this agreement (satisfaction) then discharges the original contract.
    • This process necessarily involves mutual consent.
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