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 Tennessee, 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 intention. Tennessee courts will generally uphold waivers if they are clear and unambiguous, and if they demonstrate that the waiving party intended to relinquish specific rights under the contract. Additionally, Tennessee recognizes non-waiver provisions within contracts. These provisions state that the failure to enforce or exercise rights or remedies does not result in a waiver of those rights at any future time. Such clauses are designed to protect parties from inadvertently losing their rights through inaction or forbearance. These non-waiver clauses are enforceable in Tennessee, provided they are part of the original contract and are consistent with the intentions of the parties. They are particularly common in insurance and commercial contracts, where the consistent enforcement of rights and obligations is critical to the business relationship.