Non-waiver of breach: Overview, definition, and example
What is non-waiver of breach?
Non-waiver of breach refers to a provision in a contract that ensures that a party's failure to act on a breach of contract, or their acceptance of partial performance, does not waive or forfeit their right to enforce the terms of the contract or pursue further legal remedies for the breach. Essentially, this clause ensures that just because one party overlooks a breach or continues to perform their obligations despite the breach, it does not mean they give up their right to take action at a later date.
This clause is often included to preserve a party's legal rights, even if they choose to temporarily overlook or delay their response to a breach. It prevents the unintended loss of rights due to inaction and ensures that the breach can still be addressed in the future, should the party decide to pursue enforcement.
Why is non-waiver of breach important?
The non-waiver of breach provision is important because it protects a party's ability to enforce the contract and take appropriate action when a breach occurs. Without this clause, a party might inadvertently lose their right to enforce the contract or claim damages simply by not addressing the breach immediately or by continuing to perform their obligations.
For example, if one party continues to accept late payments from the other party without objecting, the other party might argue that this acceptance of late payments indicates that the contract's payment terms are no longer being enforced. A non-waiver of breach clause prevents this type of argument, ensuring that the failure to act on one breach does not waive the right to act on future breaches or enforce the contract as originally agreed.
Understanding non-waiver of breach through an example
Imagine a company that has a contract with a supplier to deliver goods by the 15th of every month. On one occasion, the supplier delivers the goods late, but the company decides not to take any immediate action because it does not want to disrupt the business relationship. Despite not acting on the late delivery, the company does not waive its right to demand timely deliveries in the future or seek damages for the breach. The inclusion of a non-waiver of breach clause ensures that the company can still enforce the contract in the future if the supplier fails to meet the delivery deadline again.
In another example, a landlord leases property to a tenant and the tenant is consistently late with rent payments. The landlord continues to accept the late payments without objecting. However, the non-waiver of breach clause ensures that by accepting the late payments, the landlord does not forfeit the right to evict the tenant or take other legal action in the future if the breach continues or escalates.
An example of a non-waiver of breach clause
Here’s how a non-waiver of breach 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 or any other right, power, or privilege. Any waiver of any breach of any provision of this Agreement must be in writing and executed by the party granting such waiver. A waiver of any breach shall not be deemed to be a waiver of any subsequent breach.”
Conclusion
The non-waiver of breach provision is a crucial element in contracts that helps protect a party’s legal rights. By including this clause, parties ensure that they do not unintentionally lose the ability to enforce the contract or take legal action, even if they choose not to immediately act upon a breach. This provision safeguards against the risk of waiving rights due to inaction or acceptance of partial performance, giving the party the flexibility to address breaches as they see fit without forfeiting their contractual rights.
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.