Waiver Contract: Everything You Need to Know
A waiver of contract occurs when one party gives up their rights as outlined in a contract they signed.3 min read
A waiver of contract occurs when one party gives up their rights as outlined in a contract they signed.
What Is a Waiver of Contract?
A waiver of contract can happen if the party deliberately fails to take certain actions or takes a positive act to waive the terms of a contract. In order to constitute a legal release or waiver of the contract rights, this action must be intentional and voluntary.
For example, if someone received goods but chose to reject the goods at the time of delivery or turn away the person delivering the goods, this could be considered a waiver of a contract. Another way to waive the contract would be to prepare a written notice of rejection of the goods. However, if the same person refused the goods by accident because they believed they were a different type of product, this would not be considered a contract waiver because the person didn't act internationally or voluntarily.
The laws around contracts vary between states. Any contract questions or issues, including a waiver of contract, should be discussed with a lawyer in your area who understands that state's contract laws.
What Types of Contract Rights Can Be Waived?
The rights that can be waived depend on what is outlined in the contract. Contract waivers also vary among specific contracts.
Some contract waiver options include the forfeiting of rights to:
- Having the exclusive rights to purchase or sell goods
- Receiving payment for services or products
- Having the exclusive right to access or use protected or copyrighted material
- Having a product delivered at a specified time
If you're dealing with a situation involving a waiver of contract, make sure to review the laws around delegation or assignment of contractual duties, usually to a third party. Only certain rights within a contract can have duties transferred to a third party and be waived.
Can Silence Be Considered a Waiver?
Generally, silence cannot be considered a waiver because you must indicate an intentional and voluntary decision to waive contract rights.
Waiving your contract rights can occur by:
- An omission, or failing to complete an act
- A positive act
However, staying silent on a specific matter typically will not count as a contract waiver. The party must take steps to relinquish contractual rights to provide that the waiver was handled legally.
What Is a Waiver?
Waiver has a specific meaning in a legal context. This meaning is the voluntary surrender or relinquishment of specific and known privileges or rights. For example, if a business chooses not to charge a late fee to a client when the contract terms expressly outline the imposition of a penalty for a late payment, this could be considered a waiver of contract. In order to be considered a legal waiver, the party or person must take voluntary action and remove their particular ability or right outlined in an agreement.
A waiver can occur when a party takes some form of action or provides written documentation of their decision to waive their rights. The action of waiving rights removes a potential or real liability in the contract. By providing a contract waiver, one party is choosing to relinquish their legal claims or rights on a voluntary basis.
This action can apply to many different legal scenarios. For example, if two parties are settling a matter in court, one party could submit a waiver to relinquish its rights to continue pursuing further action after the finalization of the settlement.
Another way to carry out the action required to waive contract rights is acting on the right outlined in an agreement. For example, a contract might include the right to terminate the agreement within the first year. By electing not to terminate the agreement within the first year, the party would waive the right to do so in the future. To be considered a legal waiver, an actual intention to relinquish the right, knowledge of the right, and an existing right must be in place.
A waiver can be:
- Implied, based on the conduct that indicates the intent to relinquish the right
- Express, based on the words from the party waiving its rights
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