Ch. 10 Discharge by agreement

Requirements for novation

1) A previous valid obligation 2) An agreement by all parties to a new contract 3) The extinguishing of the old obligation (discharge of prior party) 4)A new contract is valid

Novation

Can discharge contractual obligations. Occurs when both parties agree to substitute a third party for one of the original parties.

Accord

Contract to perform some act to satisfy an existing contract duty that is not yet satisifed

Discharge by Accord and Satisfaction

Discharge original contractual obligation. Parties must agree to accept performance that is different from the performance originally promised.

Promise not to performed acts stipulated in original contract

can be consideration for second contract (the rescission)

Satisfaction

performance of the accord agreements

Mutual rescission

to take place the parties must make another agreement that satisfies legal requirements for contract (Offer, acceptance, consideration)