Law: Contract, Act, 1872

Section: 62,54

Law: Civil Procedure Code (V of 1908)

Section: 1(3)

(a) Interpretation of document--- ----Terms for settlement of contract---Scope---When parties sign a document containing terms on which, both the parties agree, the invitation to treat or correspondence led parties to stage at which, they signed the contract, does not have precedent and the signed document is binding on the parties. (b) Contract Act (IX of 1872)--- ----S.62---Alteration and novation of contract---Difference---Difference existed between alteration and novation of contract in S. 62 of Contract Act, 1872---Novation is complete substitution of original contract with a new contract---Original contract remains no more in existence and parties are not required to perform that---Contrarily an alteration of a contract is variation, modification or change in one or more respects which introduces new elements into details of contract, cancels some of them but leaves the general purpose and effect undisturbed---Generally modifications are read into and become part of original contract---Original terms also continue to be part of the contract and are not rescinded and/or superseded except in so far as they are inconsistent with the modifications---Those of the original terms which cannot make sense when read with the alterations must be rejected. (c) Contract Act (IX of 1872)--- ----S. 62---”Alteration” and “recission” of contracts---Distinction---Alteration may produce two consequences, firstly, where modified contract possesses an independent contractual force, or enables the parties to sue upon second contract alone as if the original contract does not exist, it is deemed that the original contract is rescinded---Secondly, where modified contract does not possess any independent contractual force or does not enable the parties to sue upon modified arrangement, then modifications are read into and become part of original contract---Original terms also continue to be part of the contract and are not rescinded and/or superseded except in so far as they are inconsistent with the modifications. Morris v. Baron and Company [1908] AC 1; Century Spinning and Manufacturing Co. Ltd. Bombay v. Motilal Dhariwal son of Dulichand (Madhya Pradesh) AIR 1966 (M.P) 313;…

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