Discharge by Agreement

• A contract may be discharged by agreement or consent of all parties to the contract , expressed or implied . 
• Section 63 of the Contracts Act 1950 provides that : 

If the parties to a contract agree to substitute a new contract for it , or to rescind or alter it , the original contract need not be performed . "

Example 1 :

X owes money to Y under a contract . Subsequently , it is agreed between X, Y and Z that Y shall henceforth accept Z as his debtor , instead of X . The old debt of X to Y is at end , and the new debt from Z to Y has been contracted .