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 Illinois, 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 known right, such as a benefit or privilege under the contract. The waiver must be voluntary and made with full knowledge of the rights being waived. This is consistent with the principle of 'knowing and voluntary relinquishment of rights.' Illinois courts will generally uphold waivers that meet these criteria, provided they do not violate public policy or statutory provisions. Additionally, 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 under the contract. Such clauses are enforceable in Illinois and help prevent unintended waivers, particularly in insurance and commercial contracts. However, the specific enforceability of any waiver or non-waiver provision may depend on the contract's language and the circumstances surrounding the alleged waiver.