Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: November 15, 2016
The Firm
201-896-4100 info@sh-law.comCertain contract provisions are found in nearly all business agreements. However, that doesn’t mean that they should be overlooked. Many provisions, including non-waiver clauses, can significantly impact the rights of the parties and should be closely reviewed with legal counsel.
In the legal context, the term “waiver” has a specific meaning. It refers to the voluntary relinquishment or surrender of some known right or privilege. By way of example, waiver may occur when a business declines to charge a late payment fee even though the terms of the contract expressly provide for the imposition of late payment fee penalties.
A non-waiver clause is designed to prevent the parties from inadvertently waiving their contractual rights. In most cases, the provision states that the parties to a contract may not change or modify the agreement unless both sides consent to the proposed change or modification in writing. In the late payment scenario above, a non-waiver clause ensures that the party did not waive its rights to require on-time payments in the future simply because it has declined to enforce its rights to late fees.
As with other contract provisions, non-waiver clauses can be written broadly or narrowly. For instance, some business contracts may be drafted to broadly state that “no breach of any provision of this Agreement will be waived except with the express written consent of the party not in breach.” An employment agreement may be narrowly drafted to state, “The waiver by the Employer of a breach by the Employee of any provision of this Agreement will not operate or be construed as a waiver by the Employer of any other subsequent breach by Employee.”
Despite the inclusion of a non-waiver provision, businesses should be aware that courts are often hesitant to enforce a contract provision that purports to limit the parties’ ability to adapt to changing circumstances. Accordingly, some courts have held that a party can modify or waive contractual provisions despite a provision purporting to limit those abilities. For instance, in Hovnanian Land Investment Group, LLC v. Annapolis Towne Center at Parole, LLC, 421 Md. 94, 25 A.3d 967 (2011), the Maryland Court of Appeals went so far as to hold that such a clause may be waived by implication as well as by express agreement, provided that the parties understood that the clause was waived.
Despite the current trend against strictly enforcing non-waiver clauses, businesses should not abandon including them in their contracts. However, it is important to be mindful that simply including the clause does not ensure that the contract may only be waived in writing. Accordingly, it is important to closely adhere to the terms of the agreement and remember that any actions inconsistent with the contract may be later construed against you.
Are you considering drafting a non-waiver clause for your contract? Would you like to discuss the matter further? If so, please contact me, Michael Jimenez, at 201-806-3364.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
Author: Christopher D. Warren
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Author: Dan Brecher
Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]
Author: Bryce S. Robins
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
Author: Dan Brecher
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Author: Bryce S. Robins
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!