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 Kentucky, a waiver of contract is recognized when a party intentionally relinquishes a known right or conducts itself in such a manner that would lead the other party to believe that a right has been relinquished. This must be a voluntary and knowing act. Kentucky courts generally uphold non-waiver provisions in contracts, which specify that the failure to enforce a right does not imply that the right is waived. These provisions are designed to prevent inadvertent waivers of rights, especially in complex commercial and insurance contracts. However, even with a non-waiver clause, a party can still be found to have waived a right if their actions clearly demonstrate an intention to not enforce that right. The specific application of waiver and non-waiver provisions can be complex and may depend on the particular circumstances of each case.