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 Delaware, a waiver of contract is recognized when a party intentionally relinquishes a known right or conducts itself in such a manner that would indicate the abandonment of a known right, benefit, or advantage under the contract. The waiver must be voluntary and made with full knowledge of the rights being waived. This is consistent with the general principle of 'knowing and voluntary relinquishment of rights.' Delaware courts typically require clear and unequivocal evidence of the intent to waive contractual rights. Furthermore, non-waiver clauses are enforceable in Delaware. 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 prevent a party from claiming that rights have been waived through inaction or forbearance and are particularly common in insurance and commercial contracts. The presence of a non-waiver clause requires parties to expressly state their intention to waive specific rights in order for a waiver to be effective.