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 South Dakota, as in other jurisdictions, a waiver of contract rights occurs when a party intentionally relinquishes a known right or conducts itself in such a manner that it is deemed to have given up certain contractual rights. This can be done either expressly, through clear language, or impliedly, through actions that suggest a party has abandoned its rights. For a waiver to be valid, it must be made voluntarily and with full knowledge of the rights being waived. South Dakota courts will generally uphold waivers that meet these criteria. Additionally, contracts in South Dakota often contain non-waiver clauses which specify that the failure to enforce a right does not amount to a waiver of that right or any other rights under the contract. These clauses are designed to protect parties from inadvertently losing their rights due to inaction or leniency. Such provisions are enforceable in South Dakota, provided they are clearly stated within the contract.