What happens when parties consent to alter a contract?

When parties consent to alter a contract, the original contract is effectively discharged. This means that the terms of the original contract are no longer in effect, as the alteration represents a new agreement between the parties. The modification results in the original terms being replaced or changed, which leads to the conclusion that the previous contract is no longer applicable.

It's essential for the alteration to be mutual, meaning both parties must agree to the new terms for it to be valid. Once the alteration is agreed upon, the contract is considered as a new or modified agreement, and the obligations set forth in the original contract cease to exist.

Understanding this principle reinforces the idea that two parties wishing to change a contract must formally acknowledge that the previous agreement is no longer valid, thus discharging it. In contrast, the other options do not accurately reflect the legal standing of contracts when alterations are made. For instance, reinstating the original contract or keeping it unchanged contradicts the nature of consent to modify; likewise, stating the alteration is not legally binding overlooks the mutual agreement aspect which validates the modification.