Non-Waiver Provision: Everything You Need to Know
A non waiver provision is the clause in a contract that attempts to keep each party's rights intact even as aspects of the agreement might not be met.3 min read
A non waiver provision is the clause in a contract that attempts to keep each party's rights intact even as aspects of the agreement might not be met. Basically, this clause is an extra protection for the enforceability of the terms of the agreement.
What Is a Non-Waiver Provision?
Non-waiver provisions are found throughout the world of business and personal contracts. Depending on the type of contract, the clause will look slightly different. In insurance coverage contracts, a non-waiver clause is put in place to remind the insured person that they maintain the right to contest their insurance coverage, even if the insurance company investigates one of their claims.
If one party in a contract momentarily excuses the other from their contractual obligations, the non-waiver provision is in place to make sure the excusing party still holds onto their rights. A contract should remain enforceable, even if it wasn't fully enforced in the past. Essentially, the giving of grace in an agreement shouldn't negate the original agreement.
Non-waiver provisions are found in many contract types, but here are some of the most common:
- Property transfer agreements
- Lease and rental agreements
- Tenant contracts
- Mortgage agreements
- Insurance coverage agreements
- Commercial lease agreements
Non-Waiver Provision in Property Transfers
If the owner of a property transfers the property to a new owner, the tenant of the property is still required to maintain rental payments on the property. The same goes in a situation where a tenant transfers their rental property to another tenant. Regardless of the property transfer, the original boundaries of the tenant contract remain enforceable.
When a tenant moves out a new one moves in to a rental property, they should sign a new contract with the landlord. This ensures that everyone understands the agreement and the money owed for the use of the property. If a tenant decides to move out and doesn't tell the landlord, they will still be required to pay the rent required by their contract. This helps prevent tenants from moving out before their lease is up and leaving landlords without rent payments.
Non-Waiver Provision in Mortgages
The effect of a non-waiver provision is similar in mortgage agreements and lease or rental agreements. If a the giver of a loan forms a mortgage agreement with a borrower and includes a non-waiver provision, the borrower cannot take advantage of any leniency of the lender.
Say a borrower was continuously late on their payments and the lender wasn't enforcing any late fees for five months. If late fees are a part of the contractual agreement, the lender reserves the right to require those be paid at any time if the borrower is late on a payment.
If the borrower has racked up a debt to their lender because of several missed mortgage payments, the lender can recover that debt at any time. For example, if a lender has allowed the borrower to pay on the 15th of the month instead of the first of the month each month for five months, they can still require payment on the first of the month. If, after five months of late payments, the lender requires a payment on time and tacks on a late fee for the late payment, the borrower would need to pay.
The court will hold up the original stipulations of the agreement, so a borrower in such a situation wouldn't have much success trying to get out of the late fee, even though it wasn't previously enforced. Non-waiver provisions prevent either party from waiving the rights laid out in their contract.
There are two ways that a waiver of contractual rights can take place. If one party continues to follow through with their end of the agreement even as the other party is not, they are electing to waive satisfaction. Without a non-waiver provision, this could lead to the performing party losing their right to obtain payment for their performance.
If you constitute a waiver, you pass on the right to collect damages from a failure of the other party to perform. A non waiver provision in a contract simply states that a waive of contractual rights cannot take place unless both parties agree. If both parties involved in the agreement sign a waiver for the original conditions of the contract, then their contractual rights can be waived, even with the existence of a non-waiver provision.
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