Waiver of Contract Laws

A contract is an oral or written agreement between two or more parties that creates mutual legal obligations between the parties. Contracts are extremely common in the business world.

To be valid and enforceable, a contract must include:

• An offer
• An acceptance of the offer presented
• A promise on each side to perform their contractual duties
• Valuable consideration from each party (“consideration” means something that each party will give up or do. For example, in a contract to buy a car, the buyer’s consideration is the money for the car, and the seller’s consideration is turning over ownership of the car)

Contracts must be entered into by all parties voluntarily. All parties signing the contract must do so of their own free will and must not be under any sort of force, duress, or undue influence.

The term “waiver of contract” refers to surrendering (giving up) contract benefits. This can be accomplished either by a positive act or through a deliberate failure to take specific actions. Just as in the formation of the contract, a waiver of the contract must be both voluntary and intentional to constitute a legal waiver.

An example would be if a delivery person appears with goods the recipient ordered, but the party turns away the delivery person or, in another way, rejects the goods being delivered. Refusing goods could result in a waiver of the contract. However, if the party accidentally refused the goods, it might not be a waiver because they did not act intentionally.

Alternatively, the recipient may waive their contract rights by sending the other party a written message indicating they intend to refuse to accept the goods.

A “release” or “release clause” is an agreement between parties to a contract that states that one of the parties will forfeit their rights to any claim or lawsuit. It typically states that the releasing party is relinquishing or forfeiting their right to sue or bring a lawsuit against the other party. Releases may be signed as a separate agreement, or they may be included as a provision in the underlying contract.

Although waivers and releases are very similar, there are some differences between the two. The biggest of these differences is that when rights are released, those rights can then be transferred to another party, whereas when rights are waived, those rights cease to exist entirely.

Signing a waiver or a release can severely limit legal remedies should any disputes arise, so it should be taken very seriously. It is best to discuss it with an attorney before you take any action or sign anything.

What Types of Contract Rights Can Be Waived?

Waivers vary according to the language of each contract. What types of contract rights can be waived depends on the rights listed. Some examples of waiver of contract may involve forfeiting the rights to:

• Receive payment for a product or services
• Have a product delivered at a set time
• Have exclusive rights to use or access copyrighted or protected material
• Have exclusive rights to sell or purchase the goods

When considering a waiver of contract, it is important also to consider the laws regarding the assignment or delegation of contractual duties to a third party. Assignment refers to the transfer of the benefits of a contract to another party.

An example of this would be if a contract entitles you to receive $100 for painting a house, and you transfer the right to receive that $100 to another person. Delegation of duties refers to transferring the obligations of a contract: the contract requires you to perform some duty, and you designate someone else to perform that duty (such as painting a house) in your place.

Can One Party’s Silence Be Considered a Waiver?

Generally speaking, no, one contract party’s silence would not constitute a contract waiver. As previously discussed, the waiver must occur in such a way that indicates a voluntary and intentional decision.

Mere silence on a matter is generally not enough to be considered a waiver of contract. The waiving party must take steps to give up their contractual rights for the court to find that a waiver existed.

What Do I Need to Know About Contract Attorneys?

A business contract lawyer provides legal assistance and advice regarding business contracts. These attorneys most commonly draft, review, and negotiate business agreements for their clients. While all attorneys have some knowledge of contract law, contract attorneys are especially experienced in this specific area of the law.

They have practical knowledge regarding:

• Contract requirements, or what makes a contract legally enforceable
• State and municipal laws that govern contracts in their jurisdiction
• Leases
• Sales contracts
• Subsidiary contracts
• Supply contracts
• Intellectual property contracts, which usually involve the complex matter of licensing intellectual property
• Tax contracts, such as property tax, international tax, and corporate taxes
• Employment contracts
• Affiliate agreements
• Subscription agreements

The general duties and responsibilities of a contract lawyer include, but are not limited to:

• Drafting contracts that are legally sound and enforceable and which contain all the rights and protections that their client needs
• Reviewing contracts to ensure that their client’s rights are protected
• Enforcing and protecting those rights as needed, should any legal disputes arise

Is it Expensive to Use a Contract Attorney?

Both businesses and individuals are benefited by utilizing the services of a contract lawyer. In the long run, it is almost always less expensive to contact a lawyer very early in the process. Hiring a lawyer to draft or review your contract to ensure that it meets your needs is much cheaper than hiring a lawyer to represent you in court once a dispute has arisen.

Contract attorney rates vary based on the experience of the attorney, as well as the facts of the case and how extensive the legal work that will go into resolving the case. An attorney who handles contracts will usually be less expensive in the end than a generalist because the specialty lawyer won’t have to research to get up to speed on the law, as a general attorney might.

Other factors that may affect the cost of attorney’s fees include:

• Whether the attorney utilizes an hourly fee structure (e.g., $XXX per hour) or a flat fee structure (e.g., $X, XXX per case)
• If the attorney charges on an hourly basis, the number of hours the attorney spends working on the case and the attorney’s hourly rate
• The cost of filing fees (the local court system sets this)
• Whether the case goes to mediation, arbitration, or is settled outside of court
• Whether the case ends up being tried in court

Many contracts will include a clause that details how disputes are to be resolved. Some contracts require the parties to attempt other conflict resolution methods, such as mediation or arbitration before they are allowed to file a lawsuit.

Do I Need a Lawyer for Help With a Waiver of Contract?

Because contract laws vary from state to state, you may wish to consult with a local attorney to provide clarity regarding the terms of your contract. If you are experiencing any issues with your contract, such as a waiver of contract, you should consult with a skilled and knowledgeable contract lawyer in your area.

An experienced local contract attorney will help you determine what your contractual duties and legal rights are and how best to resolve any disputes that arise. An attorney will always have your best interests in mind and will be able to represent you in negotiations, mediation, arbitration, and trial court if it comes to that.