No implied waiver: Overview, definition, and example
What is "no implied waiver"?
The term "no implied waiver" refers to a legal concept in which one party’s failure to assert a right or enforce a provision in a contract does not mean that the party has waived, or given up, that right or provision. In other words, just because one party delays or refrains from exercising their rights under a contract, this does not automatically imply that they have abandoned those rights. The "no implied waiver" clause is often included in contracts to make it clear that the parties must actively agree to waive rights or obligations, and that silence or inaction should not be interpreted as waiver.
For example, if a lender fails to immediately enforce a late fee provision when a borrower misses a payment, the lender has not waived the right to enforce that provision later. The "no implied waiver" clause ensures that the lender retains the right to enforce the contract as originally written, even if they do not act right away.
Why is "no implied waiver" important?
The "no implied waiver" concept is important because it provides legal protection to parties by ensuring that they do not unintentionally lose their rights through inaction or failure to immediately enforce provisions in an agreement. It allows parties to maintain their contractual rights and obligations, even if they choose to overlook a breach or delay enforcement temporarily. This is particularly important in long-term contracts or relationships, where minor breaches or delays may occur but should not automatically result in the loss of rights. By clearly specifying that no waiver is implied, the clause helps prevent misunderstandings and protects the integrity of the contract.
Understanding "no implied waiver" through an example
Let’s say a business enters into a service contract with a vendor, stipulating that payments must be made within 30 days of receipt of an invoice. If the vendor submits an invoice late or does not make a payment on time, the business may choose not to immediately enforce the penalty or seek a remedy. However, under the "no implied waiver" principle, the business’s failure to act does not mean that the vendor is excused from fulfilling the obligation or paying the penalty. The business can still choose to enforce the contract in the future without the need to re-establish the original terms.
In another example, if a landlord does not immediately enforce a clause requiring tenants to maintain a certain level of property upkeep, the tenants cannot assume that the landlord has waived this obligation. The landlord retains the right to enforce the lease terms, even if they have not actively done so in the past.
An example of a "no implied waiver" clause
Here’s how a "no implied waiver" clause might appear in a contract:
"No failure or delay by either Party in exercising any right, power, or privilege under this Agreement shall operate as a waiver of that right, power, or privilege, nor shall any single or partial exercise of any right, power, or privilege preclude any further exercise thereof."
Conclusion
The "no implied waiver" principle ensures that parties to a contract retain their rights and obligations even if they do not immediately enforce them. This legal safeguard prevents the accidental loss of rights and clarifies that failure to act does not constitute a waiver of terms. By including a "no implied waiver" clause in an agreement, parties can avoid misunderstandings and ensure that they can assert their rights at any time, maintaining the enforceability of the contract.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.