Discharge by agreement or consent
(a) Sec. 62 lays down that if the parties to a contract agree to substitute a new contract for it or to rescind or to alter it the original contract is discharged and need not be performed.
The various cases of discharge of contract by mutual agreement are dealt with in Sec. 62 and 63 are given below.
Rescission Sec. 62: Notation takes place when a new contract is substituted for an existing one between the same parties.
Example: 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) Rescission Sec. 62: Rescission of a contract takes place when all or some of the terms of the contract are cancelled. It may occur
(i) By mutual consent of the parties or
(ii) Where one party fails in the performance of his obligation in such a case the other party may rescind the contract without prejudice to his right to claim compensation for the breach of contract.
Example: A promises to supply certain goods to B six months after date. By that time, the goods go out of fashion. A and B may rescind the contract.
(c) Alteration (Sec 62): Alteration of a contract may take place when one or more of the terms of the contract is are altered by the mutual consent of the parties to the contract. In such a case, the old contract is discharged.
Example: A enters into a contract with B for the supply of 100 bales or cotton at his Godown No. 1 by the first of the next month. A and B may after the terms of the contract by mutual consent.
(d) Remission Sec. 63) Remission means acceptance of a lesser fulfilment or the promise made, i.e. acceptance of a lesser sum than what was contracted for the discharge of the whole of the debt.
Example: A owes B Rs. 50,000. A pays to B and B accepts in satisfaction of the whole debt. Rs. 20,000 paid at the time and place at which Rs. 50,000 were payable. The whole debt is discharged.
(e) Waver: Waver takes place when the parties to a contract agree that shall no longer be bound by the contract. This amounts to a mutual abandonment at rights by the parties to the contract.
(f) Merger: Merger tales place when an inferior right accruing to a party under a contract merger into a superior right accruing to the same party under the same on some other contract.
Example: P holds a property under a lease. He later buys the property. His rights as a lessee merge into his rights as an owner.
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