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 Maryland, a waiver of contract rights occurs when a party intentionally relinquishes a known right or conducts itself in such a manner that it is deemed to have given up certain rights under the contract. This waiver must be knowing and voluntary, meaning the party waiving the rights must fully understand the rights they are foregoing and must choose to waive them without coercion. Maryland courts will generally uphold waivers if they are clear and unambiguous. Additionally, contracts in Maryland often include non-waiver clauses which specify that the failure to enforce a right does not amount to a waiver of that right or any other rights provided by the contract. These clauses are designed to protect parties from inadvertently losing their contract rights through inaction or forbearance. Such provisions are enforceable in Maryland and are particularly prevalent in insurance and commercial contracts to ensure that parties retain their rights even if they do not immediately enforce them.