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 Alabama, a waiver of contract rights occurs when a party intentionally relinquishes a known right or conducts itself in a manner that warrants an inference of the relinquishment of such right. This waiver can be either expressed, through clear and unequivocal language, or implied, through actions or conduct that suggest the party has chosen not to enforce that right. For a waiver to be valid, it must be made voluntarily and with full knowledge of the rights being waived. Alabama courts generally uphold non-waiver clauses in contracts, which specify that the failure to enforce a right does not amount to a waiver of that right or any other rights under the contract. These clauses help to prevent inadvertent waivers and provide clarity to contractual relationships. However, even with a non-waiver clause, a party can still intentionally and knowingly waive its rights. Such waivers are common in various types of contracts, including insurance and commercial agreements, to ensure that temporary forbearance or inaction on a particular occasion does not lead to a permanent loss of rights.