An organisation may sometimes need to change some part of the agreement or contract rather than discard the contract altogether. That is when a deed of novation is used just to make the changes in the agreement or contract. In real estate, as per the
novation of contract Indian contract act, when a property is sold and there is some mortgage loan that needs to be paid off and transferred to third parties then the Deed of Novation is to be entered. This is the novation contract law.
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In the deed of novation, the original contract should be substituted with a new one.
As long the new contract comes into existence the clause in the original contract is enforceable.
According to the Indian Contract Act, 1872 the new contract should be valid.
Both the parties must be aware of what has been substituted from the original contract to the new contract.
After the new contract is created both parties can follow the new contract and excuse performance under the original contract.
To
novate the contract, both parties must sign the novate agreement and must wait until the original contract is substituted with a new one. I will share an attachment of the novate contract so that you can get a better insight. This was all about novation contract law. I hope you find this informative.
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How to novate a contract?
Kangana
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2022-06-21T10:24:29+00:00 2022-06-21T16:49:57+00:00Comment
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