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 Iowa, a waiver of contract is recognized when a party intentionally relinquishes a known right or conducts itself in such a manner that would reasonably be interpreted as relinquishing a right, and it does so voluntarily. This means that the party must have knowledge of the right and make a conscious decision to forego it. The courts in Iowa will generally uphold such waivers if they are made knowingly and voluntarily. Additionally, Iowa law acknowledges the validity of non-waiver clauses within contracts. These clauses state that the failure to enforce or exercise rights or provisions of the contract does not amount to a waiver of those rights or any future rights under the contract. Such clauses are particularly prevalent in insurance and commercial contracts to prevent any misunderstanding that might arise from a party not immediately enforcing a right or provision. The presence of a non-waiver clause requires clear and unequivocal evidence of intent to waive if a party claims that a waiver has occurred despite the clause.