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 Maryland, a waiver of contract rights occurs when a party intentionally relinquishes a known right or conducts itself in such a manner that would lead the other party to believe the right has been relinquished. This is consistent with the general principle that waivers must be knowing and voluntary. Maryland courts require clear and unequivocal evidence that a party intended to waive its rights. The presence of a non-waiver clause in a contract is recognized and enforced by Maryland courts. Such clauses stipulate that the failure to enforce a right or provision does not amount to a waiver of that right or any future rights. This means that even if a party does not exercise a contractual right, it does not lose the ability to enforce that right at a later time, provided that the contract contains a non-waiver provision. These provisions are particularly common in insurance and commercial contracts to prevent inadvertent loss of rights through inaction or course of dealing.