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 Pennsylvania, 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 right under the contract. This must be a voluntary and knowing act, often requiring clear and unequivocal evidence that the party intended to waive the right. Pennsylvania courts generally uphold non-waiver clauses in contracts, which specify that the failure to enforce or exercise rights does not result in a waiver of those or any other rights. Such clauses are designed to prevent inadvertent waivers and are commonly found in insurance and commercial contracts. The effectiveness of a non-waiver clause, however, may depend on the specific circumstances and the conduct of the parties. It is important for parties to a contract to be aware of these provisions and to act accordingly to avoid unintended waivers.