A owes Rs 10 000 to B under a contract it is agreed between A B amp C that B shall henceforth accept...........

Indian Contract Act (ICA)1872 Discharge and Breach of Contract

A owes Rs. 10,000 to B under a contract it is agreed between A,B & C that B shall henceforth accept C as his Debtor instead of A for the same amount. Old debt discharged and a new debt from C to B is contracted. This is:

Rescission of contract

Novation of contract

Alteration of contract

None of the above

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Explanation:

- In this scenario, A owes Rs. 10,000 to B. All parties agree that B will now treat C as his debtor instead of A for that amount.

- The original obligation of A to B is discharged, and a new obligation arises between C and B for the same sum.

- Option 1: Rescission of contract – This means cancelling the contract as if it never existed, reverting parties to their original positions. That is not what happens here.

- Option 2: Novation of contract – This is when a new contract replaces an old one, either by changing the parties or the terms. In this case, C replaces A as B’s debtor, which is classic novation.

- Option 3: Alteration of contract – This involves changing the terms of the existing contract, not substituting one party for another.

- Option 4: None of the above – Not correct, as Option 2 fits best.

- Correct Answer: Option 2 - Novation of contract