Question

A contract stand discharged by mutual agreement or consent in case of __________.

• A. novation
• B. rescission
• C. merger
• D. any of the above three

Answer 1

Answer: (D)

any of the above three

Novation as per section 62 mean replacing the old contract with a new one. New contract may be either between the same parties or between different parties, the consideration being mutually the discharge of the old contract.

As per section 64 of the act, rescission means cancellation of the contract. A contract can be rescinded by mutual consent before its breach or by the aggrieved party who can rescind the contract without in any way effecting his right of getting compensation for the breach of contract or by the party whose consent is not free.

A contract is discharged or terminated by operation of other laws such as Merger. Merger implies coinciding and meeting of an inferior and superior right on one and the same person. In such a case inferior right available to a party under an agreement will automatically vanish.

All these methods through which discharge of contract by mutual agreement takes place.