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 made knowingly and voluntarily, which means the party waiving the rights must do so with full awareness and intention. This principle is consistent with general contract law principles that require a clear and unequivocal intent to relinquish a contractual right. Texas courts will look for evidence that the waiver was intentional and not made by mistake or under duress. Additionally, many contracts contain non-waiver clauses that specify that the failure to enforce a right does not amount to a waiver of that right or any other rights under the contract. Such clauses are designed to prevent inadvertent waivers and are enforceable under Texas law, provided they are part of a validly executed contract. These non-waiver provisions are particularly prevalent in insurance and commercial contracts to ensure that parties retain their rights even if they do not exercise them in every instance where they could.
