Waiver Clause

Meaning

The word ‘waiver’ means to give up a right or interest by choosing (intentionally or not) to let the opportunity to enforce the right or interest pass. In simple words, to waive something means to not enforce it.

Waiver clauses are clauses in a contract that govern the following-

  1.  how a party to the contract can waive their right/s; and
  2. what happens when any party to the contract waives their right/s.

Importance of waiver clause

Waiver clause in a contract seeks to limit the effect of the general law of waiver. General law of waiver states that if one right of s person is waived doesn’t mean that all other rights will be waived. Doing so is intended to prevent a loss of legal rights. But the parties are not always successful in doing so.

Whether prevention of a waiver is effective in any case or not, depends on the following:

  • the terms of the waiver clause;
  • the events giving rise to the waiver;
  • whether there have been previous waivers;
  • whether the party seeking to rely on the waiver has done anything to reassert its rights; and
  • whether an express reservation of rights has been communicated.

Types of waiver

  1. The Affirmative Waiver

This means to waive one’s right effectively and to inform the other party to the contract of such waving of their right/s.

  • The General Waiver Prohibition

This is an expansion of the affirmative waiver, it means that not only does a person need to tell the other party that he/she is waiving a right in order to actually waive it, but also that the statement he/she is waiving will not also waive other rights. This means that a separate statement is needed for every right a person waives.

  • The Written Waiver

This means that unless a notice has been given in writing regarding the waiver of a clause and signed by the person in writing, the person retains the ability to enforce his/her rights.\

  • The Course of Dealing Waiver

This means that even if we partially waive a right, a person can still fully exercise the right in the future with the party. Basically, it says that waving the first right doesn’t waive other rights.

  • The complete Non-Waiver

This type incorporates a merger of multiple types of waivers such as affirmative waiver, general waiver and many more.

Enforceability of the clause

Unfortunately, this clause is not applicable in all the situations even if a contract contains a complete non-waiver clause. Every party must have their own waiver clause based on the situation. There have been many cases based on how a party can waive the right to enforce a non-waiver clause. For example, in the case of T.A. Chaudry v/s State of A.P. & Ors. it is stated that, “Waiver is not applicable in the case of waiver of public rights or fundamental rights. Waiver of right may be oral or written or inferred from the conduct. It also doesn’t involve rewriting of an agreement.”

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