A waiver of contract occurs when a party to a contract waives or gives up one or more rights or benefits it has under the terms of the contract. A party generally does not waive its rights unless the waiver is made voluntarily and with knowledge of the rights being waived—known as a “knowing and voluntary relinquishment of rights.”
Contracts often include a non-waiver paragraph or provision stating that a party’s (or the parties’) failure to pursue or exercise certain rights under the contract does not constitute a waiver of those or other rights under the contract. Such non-waiver provisions are common in insurance contracts and other commercial contracts.
In Texas, a waiver of contract rights must be intentional, voluntary, and with full knowledge of the rights being waived. This is consistent with the general principle that waivers should be knowing and voluntary relinquishments of rights. Texas courts will typically look for clear and unequivocal evidence that a party intended to waive its rights under a contract. Non-waiver clauses are commonly included in contracts to clarify that the failure to enforce a right or provision does not amount to a waiver of that right or any future rights. These clauses are enforceable in Texas and serve to protect parties from inadvertently losing their contract rights through inaction or forbearance. Such provisions are particularly prevalent in insurance and commercial contracts, where the consistent enforcement of rights and obligations is critical. It's important for parties to a contract to understand the implications of these clauses and to act accordingly to preserve their contractual rights.
