Waiver of rights: Overview, definition, and example
What is waiver of rights?
A waiver of rights occurs when a party voluntarily gives up a legal right or agrees not to enforce certain provisions of a contract. This can happen explicitly (through written or spoken communication) or implicitly (through actions or inactions). A waiver doesn’t mean the entire contract is invalid; it typically applies to specific rights or breaches.
For example, a party might waive their right to enforce a late payment penalty if they accept a delayed payment without objection.
Why is waiver of rights important?
The waiver of rights is important because it provides flexibility in contractual relationships while maintaining legal clarity. It allows parties to adapt to changing circumstances without invalidating the entire contract. However, waivers should be clearly documented to avoid misunderstandings or unintended consequences.
For businesses, a waiver of rights clause is essential to avoid inadvertently losing the ability to enforce future rights. It ensures that a single instance of leniency doesn’t set a precedent for future breaches or obligations.
Understanding waiver of rights through an example
Imagine a landlord and tenant enter into a lease agreement that requires rent to be paid on the first of each month. If the landlord accepts late rent payments for several months without objection, they might be seen as waiving their right to enforce the strict due date in the future. A waiver of rights clause could protect the landlord by stating that accepting late payments does not waive the right to enforce timely payments later.
In another scenario, a supplier and retailer have a contract specifying that orders must be placed with two weeks' notice. If the supplier fulfills an order with shorter notice without addressing it, they might unintentionally waive their right to enforce the two-week notice requirement in the future. A waiver of rights clause can clarify that such flexibility does not apply to future orders.
An example of a waiver of rights clause
Here’s an example of how a waiver of rights clause might appear in a contract:
“No waiver of any term, provision, or condition of this Agreement shall be deemed to be a waiver of any other term, provision, or condition, nor shall any waiver of any breach be deemed to constitute a waiver of any subsequent breach. Any waiver must be expressly made in writing and signed by the party granting the waiver.”
Conclusion
A waiver of rights allows parties to maintain flexibility in enforcing contractual obligations without unintentionally forfeiting their legal rights. It ensures that specific leniencies or accommodations do not undermine the enforceability of the agreement as a whole.
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.