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 Alabama, a waiver of contract rights occurs when a party intentionally relinquishes a known right or conducts itself in such a manner that would imply the relinquishment of such right. This must be done knowingly and voluntarily. Alabama law requires that for a waiver to be effective, the party waiving the right must have full knowledge of its right and the intention to relinquish it. Non-waiver clauses are often included in contracts to clarify that the failure to enforce a right does not imply that the right is waived. Such clauses are enforceable in Alabama and help prevent inadvertent waivers of contractual rights, especially in commercial and insurance contracts. However, even with a non-waiver clause, a party can still intentionally and explicitly waive its rights under the contract if it chooses to do so.