Rough draft of Contract-1

NOVATION & ITS EFFECT ON CONTRACT

CHANAKYA NATIONAL LAW UNIVERSITY

MITHAPUR, PATNA (800001)
SESSION

2018-2023

Submitted by: Submitted to:

SHUBHAM SUDHASHIL Mrs. SUSHMITA SINGH

ROLL NO. 1976 (Lecturer of Contract)

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Introduction

A contract can be discharged by the parties either by entering into a new contract in substitution
of the old contract or by acceptance of performance of modified obligations instead of obligations
stipulated in the contract. The term novation implies that there being a contract in existence some
new contract has been substituted for it between the same parties or between different parties; the
consideration mutually being the discharge of the old contract. Substitution of a new contract is
the core of novation.

The principle of ‘Novation’ of contract is defined under Section 62 of the Indian Contract Act,
1872, which provides as under: “If the parties to a contract agree to substitute a new contract for
it, or to rescind or alter it, the original contract need not be performed.”

Aims and objectives

The objective of this research is to provide a brief study as to what Novation is and what
effects does it have on a contract.

Research questions

1. What is Novation of contract?

2. Where is Novation of contract defined?
3. What effects does it have on a contract?

Hypothesis

Novation of contract refers to the act of substitution of a party or obligation in a

contract.

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Tentative Chapterization

1. What is Novation?
2. Essential features of Novation
3. Kinds of Novation
4. Novation in Financial markets
5. Novation vs. Assignment
6. Cases

Bibliography

1. Indian Contract Act, 1872

2. Law of Contract by Dr. R.K. Bangia
3. https://www.upcounsel.com/what-is-novation-of-contract
4. https://maheshspeak.com/2017/01/13/novation-of-contract/

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