A and B entered into a contract for A to construct a 20-door apartment for B. Payment shall start after the construction of ten (10). A subsequent agreement was entered into that payment will start after construction of seven (7). What is the effect of the subsequent agreement?
A)It is extinguished the obligation partly because of novation.
B)It is a modificatory novation as there was a change in the principal terms and conditions of the contract.
C)It is an extinctive novation as the two (2) agreements are incompatible.
D)It did not alter the relationship as it has no effect at all.

Question

Quizplus · Accepted Answer

The subsequent agreement changed the original terms regarding when payment should start, from after the construction of ten doors to after seven. This constitutes a modificatory novation, as it modifies the principal conditions of the original contract without extinguishing it.

A and B Entered into a Contract for a to Construct