Page:United States Statutes at Large Volume 76A.djvu/209

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–113–

-113§ 953. Satisfaction defined Acceptance, by the creditor, of the consideration of an accord extinguishes the obligation, and is called satisfaction. § 954. Part performance Part performance of an obligation, either before or after a breach thereof, when expressly accepted by the creditor in writing, in satisfaction, or rendered in pursuance of an agreement in writing for that purpose, though without any new consideration, extinguishes the obligation. Article £—Novation § 961. Novation defined Novation is the substitution of a new obligation for an existing one. § 962. Methods of novation Novation is made by the substitution of: (1) a new obligation between the same parties, with intent to extinguish the old obligation; (2) a new debtor in place of the old one, with intent to release the latter; or (3) a new creditor in place of the old one, with intent to transfer the rights of the latter to the former. § 963. Applicability of contract rules Novation is made by contract, and is subject to all the rules concerning contracts in general. § 964. Rescission of novation When the obligation of, or an order upon, a third person is accepted in satisfaction, the creditor may rescind the acceptance if: (1) the debtor prevents the person from complying with the order or from fulfilling the obligation; or (2) at the time the obligation or order is received, the person is insolvent and this fact is unknown to the creditor; or (3) before the creditor can with reasonable diligence present the order to the person upon whom it is given, he becomes insolvent. Article F—Release § 971. Extinction of obligation by release An obligation is extinguished by a release therefrom given to the debtor by the creditor, upon a new consideration, or in writing, with or without new consideration. § 972. Extent of general release A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. §973. Release of joint debtor A release of one of two or more joint debtors does not extinguish the obligations of any of the others, unless they are mere guarantors; nor does it affect their right to contribution from him.