No waivers: Overview, definition, and example
What are no waivers?
A no waivers clause refers to a provision in a contract or agreement that states that no party has waived or will waive any rights, obligations, or terms under the agreement unless explicitly stated in writing. Essentially, it is a statement that even if one party fails to enforce a provision of the contract or overlooks a breach, that does not mean they are waiving their right to enforce that provision in the future.
The purpose of a no waivers clause is to ensure that the terms of the contract are consistently enforced, even if a party is lenient or does not immediately act on a breach or non-compliance. It is designed to protect the parties involved from losing their legal rights simply because they did not enforce them at a particular moment.
Why are no waivers important?
No waivers are important because they preserve the integrity of the contract by preventing a party from unintentionally giving up their rights or obligations. Without a no waivers clause, one party’s failure to act on a breach or failure to enforce a provision could be interpreted as a waiver, meaning they can no longer enforce that provision in the future. This could lead to unintended consequences and unfair outcomes for the party who chose not to act immediately.
Including a no waivers clause provides clarity, ensuring that each party’s rights and obligations remain intact throughout the duration of the contract, regardless of any delayed action or leniency.
Understanding no waivers through an example
Imagine two companies, Company A and Company B, enter into a service agreement. Company A is required to deliver a report to Company B every month. One month, Company A fails to deliver the report on time, but Company B does not immediately address the delay or demand compensation.
Without a no waivers clause, Company A could argue that by not taking action immediately, Company B has waived their right to enforce the contract in the future. However, with a no waivers clause in place, Company B can still enforce the deadline and any other provisions of the contract, even if they failed to act on the missed deadline in this particular instance.
In another scenario, an employee of Company C is required to follow a strict code of conduct. If the company overlooks a minor violation of the code, the no waivers clause would ensure that the company still retains the right to act if a more serious violation occurs later, even if the minor infraction was not addressed immediately.
An example of no waivers clause
Here’s how a no waivers clause might appear in a contract:
“No failure or delay by any Party in exercising any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege preclude any other or further exercise of such right, power, or privilege. Any waiver must be made in writing and signed by the Party granting the waiver.”
Conclusion
A no waivers clause is a vital provision that ensures the ongoing enforcement of a contract’s terms, even if one party fails to act immediately or consistently. It protects all parties from unintentionally forfeiting their rights and helps maintain the integrity of the agreement over time. This clause is particularly important in long-term contracts or agreements where delays in enforcement may occur, but it ensures that all obligations remain intact unless explicitly waived in writing.
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.