Same - Substituted Contract

233. A contract may be discharged by the substitution of a new contract,16 and this results -

(a) Where a new contract is expressly substituted for the old one.

(b) Where a new contract is inconsistent with the old one.

(c) Where new terms are agreed upon.

(d) Where a new party is substituted for one of the original parties by agreement of all three.

234. As in the case of contracts generally, the agreement of the parties may be evidenced by their conduct.

The difference between this mode and a discharge by rescission is that a discharge by rescission is a total obliteration of the contract, while by this mode a new bond between the parties is substituted in the place of the old one. A contract may be thus discharged either by the making of an entirely new and independent contract relating to the same subject, or merely by the introduction of new terms. In the latter case the new contract consists of the new terms and so much of the original contract as remains unchanged. If, for instance, parties who have contracted for the construction of a building according to specifications, and at a price, to be paid partly in cash and partly in some other way, should afterwards agree upon a change in the specifications and an increase in the cash payment, there would be substituted for the original contract a new contract, consisting of the new terms and the unchanged terms of the original.17

15 KELLETT v. ROBIE, 99 Wis. 303, 74 N. W. 781, Throckmorton Cas. Contracts, 363; Hanson & Parker v. Wittenberg, 205 Mass. 319, 91 N. E. 383. See "Contracts," Dec. Dig. (Key-No.) § 253; Cent. Dig. §§ 1146-1148.

16 McCreery v. Day, 119 N. Y. 1, 23 N. E. 19S, 6 L. R. A. 503, 1G Am. St. Rep. 793; Munroe v. Perkins, 9 Pick. (Mass.) 29S, 20 Am. Dec. 475; Hurlock v. Smith, 39 Md. 436; King v. Faist, 161 Mass. 449, 37 N. E. 456; Rollins v. Marsh, 128 Mass. 116; Cutter v. Cochrane, 116 Mass. 408; Farrar v. Tol-iver, 88 111. 408; Windham v. Doles, 59 Ga. 265; Brown v. Everhard, 52 Wis. 205, 8 N. W. 725; Tingley v. Land Co., 9 Wash. 34, 36 Pac. 1098; Sioux City Stock-Yards Co. v. Packing Co., 110 Iowa, 396, 81 N. W. 712; Andre v. Graeb-ner, 126 Mich. 116, 85 N. W. 464; Brown v. Lumber Co., 117 N. C. 287, 23 S. E. 253; Dreifus v. Exposition Salvage Co., 194 Pa. 475, 45 Atl. 370, 75 Am. St. Rep. 704. As to payment by negotiable instrument, see post. p. 546. See "Contracts," Dec. Dig. (Key-No.) § 246; Cent. Dig. §§ 1131-1138.

A new contract inconsistent with the original impliedly discharges the latter without an express provision to that effect;18 and, if new terms are agreed upon, they will by implication waive those terms of the original which are inconsistent with them, and a new contract will result, consisting, as we have seen, of the new terms and the unchanged or consistent terms of the original contract.19 An illustration is furnished by cases in which a contractor undertakes building operations for another which are to be completed by a certain time, in default of which a sum is to be paid as compensation for the delay. If, while the building is in progress, an agreement is made for additional work, by which it becomes impossible to complete the building within the time stipulated, it is universally held that the subsequent agreement is so far inconsistent with the first as to amount to a waiver of the original stipulation as to time; and, since an agreement may be made by conduct as well as by words, this principle would apply where performance within the specified time is prevented by the conduct of the other party.20

Where it is claimed that a contract has been discharged by a new contract, or by the introduction of new terms, the intention to discharge must distinctly appear, to give rise to such an impli-cati6n, from the inconsistency of the new terms with the old ones.21 A mere postponement of performance for the convenience of one of the parties, or an agreement to accept performance at a different place than that stipulated, does not operate as a discharge.22 This question sometimes arises in contracts for the sale and delivery of goods, where the delivery is to extend over some time. The purchaser requests a postponement of delivery, and then refuses to accept the goods at all, alleging that the contract was discharged by the alteration of the time of performance; that a new contract was thereby substituted, which is void for noncompliance with the statute of frauds. The courts, however, have always recognized "the distinction between a substitution of one agreement for another, and a voluntary forbearance to deliver at the request of another," 23 and will not regard the latter as affecting the rights of the parties further than this: that, if a man asks to have performance of his contract postponed, he does so at his own risk; for, if the market value of the goods which he should have accepted at the earlier date has altered at the latter date, the rate of damages may be assessed, as against him, either at the time when the performance should have taken place, or when, by nonperformance, the contract was broken, or when he ultimately exhausted the patience of the vendor, and definitely refused to perform the contract.2*

17 Green v. Paul, 155 Pa. 126, 25 Atl. 867; Hannibal H. Chandler & Co. v. Knott, 86 Iowa, 113, 53 N. W. 88; McNish v. Reynolds, 95 Pa. 4S3. See "Contracts," Dec. Dig. (Key-So.) § 245; Cent. Dig. §§ 1129, 1180.

18 Patmore v. Colburn, 1 Cromp. M. & R. 65; Renard v. Sampson, 12 N. Y. 561; Stow v. Russell, 36 111. 18; Howard v. Railroad Co., 1 Gill (Md.) 311; Chrisman v. Hodges, 75 Mo. 413; Paul v. Meservey, 58 Me. 419; Harrison v. Lodge, 116 111. 279, 5 N. E. 543; Domenico v. Association (D. C.) 112 Fed. 554, 557. See "Contracts," Dec. Dig. (Key-No.) § 21,5; Cent. Dig. §§ 1129, 1130.

19 Thornhill v. Neats, 8 C. B. (N. S.) 831; Teal v. Bilby, 123 U. S. 572, 8 Sup. Ct 239, 31 L. Ed. 263; Cornish v. Suydam, 99 Ala. 620, 13 South. 118; Farrar v. Toliver, 88 111. 408; Rollins v. Marsh, 128 Mass. 116; Rogers v. Rogers, 139 Mass. 440, 1 N. E. 122; Housekeeper Pub. Co. v. Swift, 97 Fed. 290, 38 C. C. A. 187; Myers v. Carnahan, 61 W. Va. 414, 57 S. E. 134. See "Contracts," Dec. Dig. (Key-So.) § 21,5; Cent. Dig. §§ 1129, 1180.