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 North Carolina, a waiver of contract rights must be made knowingly and voluntarily, which means that the party waiving the rights must do so with full awareness and intention to relinquish specific rights or benefits under the contract. This is consistent with general contract law principles that require a clear and unequivocal act or declaration that a party intends to waive its contractual rights. Non-waiver clauses are commonly included in contracts to clarify that the failure to enforce or exercise rights or remedies does not imply that those rights are waived. Such provisions are designed to protect parties from inadvertently losing their rights due to inaction or forbearance. In the context of insurance and commercial contracts, these non-waiver clauses are particularly prevalent to ensure that parties maintain their rights even if they do not immediately enforce them. North Carolina courts will generally enforce these provisions, provided they are part of a valid contract and the waiver is not contrary to public policy or law.