Estate of George C. Blount, Deceased, Fred B. Aftergut, Executor - Page 31

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          decedent’s bargain sale of his shares breached a fiduciary duty             
          to the ESOP or its participants is unavailing, and we decline to            
          find the 1996 Agreement invalid on this basis.                              
               Nor do we find the 1996 Agreement to be a novation of the              
          1981 Agreement.  To qualify as a novation, a contract must meet             
          four requirements.  There must be:  (i) A previous valid                    
          contract; (ii) the parties’ agreement to a new contract; (iii)              
          the extinguishment of the old contract; and (iv) a valid new                
          contract.  Savannah Bank & Trust Co. v. Wolff, 11 S.E.2d 766, 772           
          (Ga. 1940).  Here, the key question is whether the 1996 Agreement           
          extinguished the 1981 Agreement.  To satisfy this element, either           
          a mutual intent to create a novation must be shown, Mayer v.                
          Turner, 234 S.E.2d 853 (Ga. Ct. App. 1977), or the later                    
          inconsistent agreement must be one that “completely cover[s] the            
          subject matter” of the prior agreement, Powell v. Norman Elec.              
          Galaxy, Inc., 493 S.E.2d 205, 207 (Ga. Ct. App. 1997).  We                  
          consider each of these possibilities in turn.                               
               Respondent argues that the 1996 Agreement’s lack of any                
          express intent to modify the 1981 Agreement requires an inference           
          that decedent intended to extinguish the 1981 Agreement by                  
          entering into the 1996 Agreement.  We disagree.  First, we are              
          unaware of any rule requiring that a modification to a contract             
          explicitly indicate it is intended as such.  Second, that some              

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