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 Vermont, as in other jurisdictions, 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. Non-waiver provisions are commonly included in contracts to clarify that the failure to enforce a right or provision at one time does not prevent a party from later enforcing that right. These provisions help to protect parties from inadvertently losing their rights through inaction or leniency. Vermont courts will generally uphold such waivers and non-waiver provisions if they are clearly stated in the contract and if the waiver meets the standard of being knowing and voluntary. However, the specific enforceability of any waiver or non-waiver provision may depend on the context and the particular circumstances under which it was made.