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Mutual Agreement -Performance And Discharge Of Contracts
Business Environment and Law-Performance And Discharge Of Contracts
Mutual Agreement -Performance And Discharge Of Contracts
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A contract is created by the parties to it, therefore, it can also come to an end by their mutual agreement. Termination by mutual agreement may occur in any one of the following ways.
Mutual
Agreement
A contract is created by the parties to it, therefore, it can also come to an end by their mutual agreement. Termination by mutual agreement may occur in any one of the following ways.
Novation: When a new contract is substituted for an existing contract, either between the same parties or between different parties, it is called novation.
Alteration: When one or more of the terms of a contract are changed, it is called alteration. In case of alteration, parties to the contract do not change. Example: A agrees to supply to B 20 readymade pants, 10 of the size 32 and 10 of the size 34. Later on B requests A to supply all 20 pants of the size 32 only. A agrees to it. The old contract comes to an end.
A contract is created by the parties to it, therefore, it can also come to an end by their mutual agreement. Termination by mutual agreement may occur in any one of the following ways.
Novation: When a new contract is substituted for an existing contract, either between the same parties or between different parties, it is called novation.
Alteration: When one or more of the terms of a contract are changed, it is called alteration. In case of alteration, parties to the contract do not change. Example: A agrees to supply to B 20 readymade pants, 10 of the size 32 and 10 of the size 34. Later on B requests A to supply all 20 pants of the size 32 only. A agrees to it. The old contract comes to an end.
Rescission: When both the parties to a
contract agree to put an end to the
contract, without performing it, the contract is said to be rescinded by mutual
agreement. Example: A promises to supply to B 20 shirts on 15th January and B
promises to pay Rs 5000 on the same day after delivery, On 10th January, both
the parties agree that the contract would not be performed. Parties are said to
have rescinded the contract.
Remission: When a party to a contract accepts, from the other party, a performance lesser than what he had contracted for, he is deemed to have remitted the remaining performance, and the contract is discharged. Example: A owes B Rs.500 rupees but pays on by Rs. 200, and B accepts at in satisfaction of the whole debt. The whole debt is discharged.
Waiver: When a party to a contract abandons his right under the contract, the other party is released from his obligations. Example: A pays Rs 1000 to B to paint a wall for him. Later on A forbids B to paint the picture. B is no longer bound to perform the promise.
Merger: When a superior right and an inferior right coincide and meet in one and the same person, the inferior right vanishes into the superior right. This is known as merger. Example: A has taken a house on lease from B for 10 years. After one year A buys the house from B. His rights of a leasee vanish into his rights of ownership and the contract of lease comes to an end.
Remission: When a party to a contract accepts, from the other party, a performance lesser than what he had contracted for, he is deemed to have remitted the remaining performance, and the contract is discharged. Example: A owes B Rs.500 rupees but pays on by Rs. 200, and B accepts at in satisfaction of the whole debt. The whole debt is discharged.
Waiver: When a party to a contract abandons his right under the contract, the other party is released from his obligations. Example: A pays Rs 1000 to B to paint a wall for him. Later on A forbids B to paint the picture. B is no longer bound to perform the promise.
Merger: When a superior right and an inferior right coincide and meet in one and the same person, the inferior right vanishes into the superior right. This is known as merger. Example: A has taken a house on lease from B for 10 years. After one year A buys the house from B. His rights of a leasee vanish into his rights of ownership and the contract of lease comes to an end.
Tags : Business Environment and Law-Performance And Discharge Of Contracts
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