A simple contract regarding the same matter and based on no new consideration does not destroy another simple contract between the same parties; but, if new parties are introduced so as to change the person to whom the obligation is due, the original contract is at an end. Change of nature of terms of contract is called a novation.
Stallings v. Bank of Americus, 59 Ga. Bank v. Cleveland Nat'l Bank, 59 Ga. Lindenberg v. First Fed. Such agreement constitutes a novation; a new person is introduced to whom obligation is due. Wofford v. Gaines, 53 Ga. Wolff, Ga. Smith, 78 Ga. Ridgeway, Ga. International Sys. In every novation there are four essential requisites: 1 a previous valid obligation; 2 the agreement of all the parties to the new contract; 3 the extinguishment of the old contract; and 4 the validity of the new one.
If these essentials, or any one of them, are wanting, there can be no novation. Buttrill, Inc. Air Conditioning Contractors, Ga. Farris v. Pazol, Ga. Novation is itself a contract and must have all elements of de novo contract. A novation or accord and satisfaction is in itself a contract and must have all the elements of a de novo contract. Therefore, there must be a meeting of the minds if the novation or accord and satisfaction is to be valid and binding. Novation is a complete contract in itself.
Franchise Enters. There must be a mutual intent to create a novation. To discharge existing contract, subsequent, inconsistent agreement covering same subject matter must be valid contract, and not nudum pactum. Carter v. Rich's, Inc. Novation must be supported by some new consideration.
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Bradbury v. Morrison, 93 Ga. Consideration for novation is not original indebtedness, but change in obligation of parties. Cherry v. Jones, 41 Ga. Dure, 60 Ga. Agreement to pay more for same performance required by prior contract between same parties is unenforceable. All parties need not expressly agree that new contract shall take place of original contract to constitute a novation, but only that the parties agree that new contract itself be executed.
