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 New Jersey, a waiver of contract rights must be a knowing and voluntary relinquishment of those rights. This means that the party waiving the rights must do so with full awareness and understanding of the rights they are giving up, and without any coercion or undue influence. The courts in New Jersey will generally uphold waivers if they meet this standard. Additionally, contracts in New Jersey often contain non-waiver clauses which specify that the failure to enforce or exercise any rights or provisions of the contract does not constitute a waiver of those rights. Such clauses are designed to protect parties from inadvertently losing their rights due to inaction or oversight. These non-waiver provisions are enforceable in New Jersey, provided they are clearly stated in the contract. This is particularly common in insurance and commercial contracts, where the consistent enforcement of rights and obligations is critical to the business relationship.