'A's failure to deliver the installment as a defense in a suit upon the entire contract? If the evidence shows that a failure to receive the installment has practically defeated the ends which the purchaser had in view in making the contract, or was accompanied by conduct on the part of A which indicated to B that A did not intend to perform the agreement, the failure to deliver ought to constitute a good defense. If on the other hand, such does not appear to be the case, the plaintiff ought to be allowed to recover subject to any set-off which the purchaser may have as a result of not receiving the particular installment.

In Bettini v. Gye, A agreed to sing at B's theater, in opera, and also in concerts. He agreed to be present for rehearsals at least two weeks before the opening of the concert season, but owing to illness, he was unable to appear until the time fixed for the beginning of his contract. B set this up as a breach which justified him in putting an end to the contract. The court held, however, that it appeared that A was to begin his engagements by singing in opera. It was, therefore, unnecessary for him to appear for rehearsals, and the breach was not one going to the substance of the contract. On the other hand, in the case of Poussard v. Spiers, A employed under a contract to sing in opera only, was unable to appear at the opening night of the opera season. Accordingly B put an end to the contract. It was held he was justified in doing so, since it was evident that the failure of a leading singer to appear at the opening night of the opera was a breach which would go to the very substance of a contract, and would justify B in putting an end to it, and making arrangements with other parties.

Section 9. Discharge of Contracts.

§ 83. Rescission by mutual agreement. After parties have made a contract, if for any reason they desire to terminate their obligations, they may do so by mutual release, or rescission.1 In a case of this sort the parties give up their respective rights under the original contract. The new agreement must contain the essentials of a binding contract. The necessary considera

1 1 Collyer & Co. v. Moulton, 9 R. I. 90.

tion is found in the mutual giving up of rights under an old contract. It is not enough that B says he will give up all claims against A, since this would amount to a mere offer. To be effective as a rescission A must likewise surrender his rights under the contract.2 The original contract need not be rescinded in terms; if the parties enter into a further contract, which is wholly or partially inconsistent with the original, the latter is rescinded by implication.

§ 84. Dependent relative rescission. If the new contract is invalid for any reason, the question arises: Does the old contract remain in force? It is possible for the new agreement to operate as a rescission if the parties so intend it, and it will so operate if it expressly rescinds it; but it will not rescind it by implication, since the courts will assume that the parties intended to make a contract, and intended that, if the new agreement is ineffective, the original one shall stand.3

§ 85. Rescission for a default under the contract. Where one of the parties to a contract has substantially failed or refused to perform within the time stipulated, the party not in default may treat the contract as at an end, save for his right of action on the defaulting party's promise; thus if A contracts to build a house for B and fails to proceed, B may elect to treat the contract as ended and may also sue A on his promise.

§ 86. Release. The right of action can be released by an instrument given upon good consideration. A form of release is given on the next page.

2 King v. Gillett, 7 M. & W. 55.

3 Noble v. Ward, L. R. 2 Exch. 135.

GENERAL RELEASE.

KNOW ALL MEN BY THESE PRESENTS, that I William Smith...

....of Chicago...

in the County of Cook and State of Illinois for and in consideration
of the sum of One Hundred Dollars ($100.00) lawful money of the
United States of America, to me in hand paid by John Kenyon,..

have remised, released, and forever discharged, and, by these Pres-
ents, do, for myself and my heirs, executors, and administrators, re-
mise, release, and forever discharge the said John Kenyon, his heirs,
executors, and administrators, from any and all liability arising out
of a certain contract for construction work entered into between the
said William Smith and the said John Kenyon and bearing date the
third day of October, 1898, of and from all manner of actions, cause,
and causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controver-
sies, agreements, promises, variances, trespasses, damages, judgments,
executions, claims and demands, whatsoever, in law or in equity,
which I now have against him, ever had, or which my heirs, executors,
or administrators, hereafter can, shall, or may have, for, upon, or
by reason of any matter, cause, or thing, whatsoever, from the be-
ginning of the world, to the day of the date of these Presents.

IN WITNESS WHEREOF, I have hereunto set my hand and seal, the
fifth day of April in the year of our Lord one thousand nine hundred
ten.

(Signed) William Smith [SEAL]

Sealed and Delivered in the Presence of

(Signed) Clarence Smith

(Signed) John Jones

. [SEAL]

. [SEAL]

§ 87. Accord and satisfaction: Unilateral. If A is indebted to B for $500 which is due and B promises to release the debt if A will deliver to B a horse, B may nevertheless sue upon the original debt before the horse is delivered, and may even refuse

the horse if tendered, the reason being that B's promise is a mere offer which may be withdrawn at any time before acceptance by A.1

§88. Same: Bilateral. If in the above case the parties mutually promise to deliver the horse and release the debt, B can still sue A for the $500, and the new contract will not be admitted as a defense. Since the parties have not agreed that the new contract shall take the place of the old obligation," the court will not allow the new agreement to be set up, since if received it would be in law a complete bar to any further action on the original contract, and if A did not deliver the horse, B's only remedy would be for breach of promise to deliver, while he only intended to forego his rights under the old agreement in case the new promise was carried out. Hence, we have the general rule that the new agreement technically known as an accord, can not be set up as a defense to an action on the original contract. Yet if the new agreement is carried out, we have an accord and satisfaction which is a good defence to a suit on the original debt. The accord, however, is itself a perfectly good contract, and when violated by the suit on the original contract may be sued upon by A.

§ 89. Conditional satisfaction Where the debtor gives his note for a debt due, it is not resumed that the original obligation is discharged. While it is evident that the creditor is willing to forgive the old promise if the new promise is performed, it will not be assumed that he is willing to rely on the new promise exclusively. Accordingly when the new obligation becomes due, and is not paid, the creditor may sue either on the new promise or the original one at his election. The above is the rule in the absence of a clear intent of the parties to put an end to the old transaction.

§ 90. Accord and satisfaction by implication. Accord and satisfaction may be inferred from the conduct of parties where there is no express agreement. Thus, A has a claim against B which is unliquidated. He makes a demand for $50 which he

4 Kromer v. Heim, 75 N. Y. 574.

'Morehouse v. 2nd Nat'l Bank, 98 N. Y. 503. Ford v. Beech, 11 Q. B. 852.

conceives to be the amount due. B sends his check for $25 stating that it is to be accepted as payment in full. A retains the check and perhaps notifies B that he will apply the same on account and hold B for the balance claimed. If A sues B for the balance, the majority of American courts hold this to be a good accord and satisfaction, the retention of the check being regarded as an acceptance of the terms on which it was sent."

§ 91. Novation: Definition. Subsisting obligations under a contract may be destroyed by the substitution of new parties for one or both of the former parties to the original obligation. This method of rescission is known in law as a novation.

§ 92. Substitution of parties. A substitution of parties is accomplished by the erection of a series of new agreements by the terms of which one of the original parties is released, and in consideration thereof, the new party assumes the obligation. To be valid all the parties to the new and old contracts must be parties to the new agreement. Thus, if A owes B and it is desired to substitute C in A's stead, the parties meet together and in consideration that B release A, C promises to assume the debt. As a result B's claim against A is wiped out, and a new contract on the same terms arises between C and B. It is not essential that A be an actual party to this arrangement, but it seems necessary that C be authorized by A to enter into the contract and to act as his agent, since it would be officious for a stranger to step in and pay A's debt to B and consequently not binding.

The most difficult question in the cases is one of fact to determine whether or not the creditor really intended to release the debtor. The question is commonly presented in this form. A is a creditor of the firm of B and C. It is agreed between B and C that C shall retire from the business and as part of the consideration for his interest, B agrees to assume the debts of the firm and A is notified of this arrangement and assents to it. It would seem that this would not constitute a novation unless A agreed in terms to release C from liability on the firm's debts, and that an intent to give up legal rights should not be assumed merely because of a general assent by the creditor to

Nassoly v. Tomlinson, 148 N. Y. 326.

Cochrane v. Green, 9 C. B. (N. S.) 448.