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 New York, 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 made voluntarily and with full knowledge of the rights being waived. This is consistent with the principle of 'knowing and voluntary relinquishment of rights.' Non-waiver clauses are commonly included in contracts to clarify that the failure to enforce a right or provision does not imply that the right or provision is waived. Such clauses are enforceable in New York and serve to protect parties from inadvertently losing their rights due to inaction or forbearance. In the context of insurance and commercial contracts, these non-waiver provisions are particularly prevalent and are upheld by New York courts, provided they are clearly stated within the contract and the conduct of the parties does not unequivocally demonstrate an intent to waive the rights in question.