Novation: The substitution of the original or existing contract with the new one
Alteration: It means change in one or more terms of the contract, with the same parties
Rescission: cancellation of a contract
Remission: acceptance of a higher performance
Answer is Right!
Answer is Wrong!
The correct answer is D. Remission: acceptance of a higher performance.
Remission is not a type of discharge by agreement. It is a type of discharge by release. A release is a contract in which one party agrees to forgive the debt of another party. Remission is a type of release in which the creditor agrees to forgive the debt even though the debtor has not performed all of the terms of the contract.
Novation, alteration, and rescission are all types of discharge by agreement. Novation is the substitution of a new contract for an old one. Alteration is the change of one or more terms of a contract. Rescission is the cancellation of a contract.
Here is a more detailed explanation of each option:
- Novation: Novation is the substitution of a new contract for an old one. The new contract must have all of the same essential terms as the old contract, and it must be made between the same parties. The old contract is then discharged.
- Alteration: Alteration is the change of one or more terms of a contract. The alteration must be made by all of the parties to the contract, and it must be supported by consideration. The old contract is then modified to reflect the changes.
- Rescission: Rescission is the cancellation of a contract. The contract is treated as if it never existed. Rescission can be done by mutual agreement of the parties, or it can be done by one party if the other party has breached the contract.
- Remission: Remission is the forgiveness of a debt. The creditor agrees to forgive the debt even though the debtor has not performed all of the terms of the contract. Remission is a type of release.