Section 62 of ICA : Section 62: Effect Of Novation, Rescission, And Alteration Of Contract

Explanation using Example

Section 62 of The Indian Contract Act, 1872, allows parties to a contract to mutually agree to change the terms of their original agreement, either by creating a new contract, rescinding the old one, or modifying it. Here is a simple example:

Imagine that Raj had agreed to paint Simran's house for ₹50,000. Before Raj starts the work, Simran requests additional work to be done, and Raj agrees to do the extra work for an additional ₹20,000. They both consent to this new arrangement. According to Section 62, the original contract for ₹50,000 is altered, and Raj is now entitled to ₹70,000 for the completed work under the new agreement.