If the parties do not expressly discharge the old contract when writing a novation, the old contract will be impliedly discharged if the new contract's terms are inconsistent with the old contract's terms. True or False?

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Business

Alexus Walsh

18 October, 10:31

If the parties do not expressly discharge the old contract when writing a novation, the old contract will be impliedly discharged if the new contract's terms are inconsistent with the old contract's terms. True or False?

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Anabella Barr · Answer 1

The correct answer is True.

Explanation:

In law, novation is defined as the modification or termination of a legal obligation or transmission by another subsequent obligation. If it extinguishes an obligation, it is called its own or extinction novation, if it essentially modifies the preexisting obligation, it is called an improper or modifying novation.

The objective Novation is a contract whereby the party extinguishes the original obligation by replacing it with a new obligation with a different purpose or title. The institution in question apparently has the category of way of extinguishing the obligations, particularly in the unsatisfactory way as long as it does not fulfill the interest of the creditor. The debit is extinguished, but the credit was not satisfied.