Kuwait Court of Cassation principle number 103

Summary: - Novation of an obligation. Its nature: a contract whereby the parties agree to replace the original obligation with a new obligation differing in its subject matter, source or parties. The intention to novate must be express in the contract or manifest beyond doubt. Merely executing an instrument for a pre-existing debt does not constitute novation, even if it includes a change in the time, place or manner of payment of that debt. The reason: that instrument does not create a new debt but merely provides a means of proving the existing debt, which remains based on its original source. Its import: the debtor's acknowledgment of the debt pursuant to an agreement does not constitute novation of the obligation incumbent upon him or a new debt. Rule: It is established in this Court's case law that the provision in Article 416 of the Civil Code that "1- An obligation is novated by the parties' agreement to replace the original obligation with a new obligation differing in its subject matter or source. 2- An obligation may be novated by changing the debtor ..... 3- An obligation may likewise be novated by changing the creditor .....", and in Article 418 of the same Law that "Novation is not presumed but must be expressly agreed upon or clearly inferred from the parties", indicates that novation is a contract whereby the parties agree to extinguish a prior obligation and replace it with another, new obligation differing in one of its essential elements relating to its subject matter, source or parties. The intention to novate must be express in the contract or, at least, clearly manifest beyond doubt. Novation is not inferred from material manifestations devoid of an intention to extinguish the prior obligation and substitute a different new obligation in its place. Merely executing an instrument for a pre-existing debt does not constitute novation, even if the instrument includes a change in the time, place or manner of payment of that debt, since the instrument does not create a new debt but merely provides a means of proving the existing debt, which retains its characteristics and remains based on its original source. That being so, the challenged judgment rejected the appellant's defence that the agreement dated 1/9/2009 relates back to the acknowledgment of debt dated 29/1/1982 and constitutes novation of the obligation entered against his liability, relying on its finding from the agreement that its contents do not constitute a new debt or novation of the obligation incumbent upon the respondent pursuant to the acknowledgment of debt, but rather a means of proving the latter debt established by the aforementioned acknowledgment, to be paid in monthly instalments as agreed in that contract. It thus correctly applied the law through a cogent inference grounded in the papers, and the challenge on this limb is therefore unfounded.