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 Delaware, a waiver of contract is recognized when a party intentionally relinquishes a known right or conducts itself in such a manner that would indicate the abandonment of a right under the contract. This must be a voluntary act and the party waiving the right must have full knowledge of the right being waived. Delaware courts typically require clear and unequivocal evidence of the intent to waive contractual rights. Non-waiver clauses are enforceable in Delaware and serve to protect parties from inadvertently waiving their rights through inaction or failure to enforce a term of the contract. Such clauses are particularly prevalent in insurance and commercial contracts, ensuring that the failure to enforce one provision does not affect the future enforceability of that or any other provision. However, even with a non-waiver clause, a party can still intentionally and explicitly waive its rights under the contract if it chooses to do so.