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 York, 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, benefit, or advantage under the contract. The waiver must be voluntary and made with full knowledge of the rights being waived. This is consistent with the general principle of 'knowing and voluntary relinquishment of rights.' Non-waiver clauses are commonly included in contracts to clarify that the failure to enforce a right or provision does not imply that a party has waived their right to do so in the future. These clauses help prevent any misunderstanding that might arise from a party not immediately enforcing a right or benefit under the contract. In the context of insurance and commercial contracts, such non-waiver provisions are particularly prevalent and serve to protect the parties' rights despite any lapses in enforcement or temporary forbearance.