PJC Business

C ONTRACTS

PJC 101.27

PJC 101.27 Defenses—Instruction on Novation Failure to comply with one agreement is excused if the parties agreed that a new agreement would take its place. COMMENT When to use. PJC 101.27 may be used to submit the affirmative defense of nova tion. Novation occurs when the rights of the parties are determined by a new agree ment that extinguishes the previous one. See Flanagan v. Martin , 880 S.W.2d 863, 867 (Tex. App.—Waco 1994, writ dism’d w.o.j.); DoAll Dallas Co. v. Trinity National Bank , 498 S.W.2d 396, 400–401 (Tex. App.—Texarkana 1973, writ ref’d n.r.e.). A novation may also be the substitution of new for old parties to an agreement. See Rus sell v. Northeast Bank , 527 S.W.2d 783, 786 (Tex. App.—Houston [1st Dist.] 1975, writ ref’d n.r.e.). If reasonable minds differ on the evidence of a new express agreement, novation is a question of law for the court. Absent an express agreement, novation is a question of fact. Chastain v. Cooper & Reed , 257 S.W.2d 422, 424 (Tex. 1953). Accord and satisfaction distinguished from novation. The defense of accord and satisfaction “rests upon a new contract, express or implied, in which the parties agree to the discharge of an existing obligation in a manner otherwise than originally agreed.” Harris v. Rowe , 593 S.W.2d 303, 306 (Tex. 1979). “An accord and satisfaction may or may not be also a novation, but where the new promise itself is accepted as satisfaction the transaction is more properly termed a novation.” DoAll Dallas Co. , 498 S.W.2d at 400.

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