The word ‘Waive’ means to give up a right.

A waiver is an arrangement in which the parties

agree to voluntarily relinquish or abandon legal rights, claim or privileges. It can be done
orally, in writing or either in an express or implied manner. According to Black’s Law
Dictionary the term ‘waive’ means the voluntary relinquishment or abandonment-express or
implied-of a legal right or advantage. Before waiving a right, the party needs to have the
knowledge of the right or the intention of waiving the right. Basically, it means the surrender
of the legal right of the parties who are involved in an agreement. A No-Waiver Clause in an
agreement is basically a stipulation (ketentuan) to make sure that neither party (tidak ada
pihak) has waived their right in an agreement to bring a suit if the other party fails to fulfil the
obligation or breach the Agreement (ketentuan bahwa tidak ada pihak yang melepaskan
haknya jika pihak satunya melanggar perjanjian.

Essential elements of a waiver 

1. A voluntary act.

2. Relinquishment or abandonment of a right.

3. Can be done either orally (via conduct) or in a written format.

4. Either express or implied,

5. Knowledge of existing rights.

6. Intention to forgo such rights.

For example, in a Property Lease Agreement, two parties named A and B have entered into
an Agreement in which Party A is the ‘Lessor’ and Party B is the ‘Lessee’. They both have
decided that B will pay the rent on the 1st of every month and if the delay occurs, then A will
charge a penalty of Rs 1000/-  on a daily basis. However, if B fails to pay the rent on the 1st
in a particular month and instead pays it on the 2nd and A does not charge the penalty
irrespective of the delay, that does not mean that he waived his right for all future delays. A
can charge a penalty in the future as and when he deems fit. 

In the case of Ramdev Food Products Pvt. Ltd. v. State of Gujarat, the Supreme Court said
that if a person alters its position with respect to fulfilling its obligations, such person, after
alteration cannot revert to its previous legal relationship. In case of Jagad Bandhu Chatterjee
vs Nilima Rani & Others, the Supreme Court said that waiver of right does not even require
any consideration or an agreement. 

Waiver under Indian Contract Act, 1872

Waiver finds its genesis under Section 63 of the Indian Contract Act, 1872, in which the party
is ready to surrender or relinquish their right to contractual performance. Section 63 of the
Indian Contract Act reads as follows: “Every promisee may dispense with or remit, wholly or
in part, the performance of the promise made to him or may accept instead of its any
satisfaction which he thinks fit.”

Section 63 talks about three ways a waiver is available to a party:

 Dispense with or remit the performance – Under this situation, the promisor shall not
be required to perform the contractual promise.

 To extend the time of performance – The promisor shall be required to perform the
contractual promise within some extended time period as may be allowed by a
promisee.

 To accept any other satisfaction instead of performance – The promisor shall be

required to perform some other promise instead of a contractual promise to the
satisfaction of the promisee.

A party voluntarily and unilaterally grants a concession to the other party by not requiring
any performance by such other party or allowing performance in some other manner not
envisaged in a contract. However, a waiver neither involves, nor results in, any amendment to
the existing contract, nor does the other party (promisor) is necessarily required to pay any
specific consideration solely in pursuance to Waiver.

What is the purpose of having a no-waiver clause?

Since the no-waiver clause is a standard clause, it is present in most of the agreements. The
need to have a waiver or no-waiver clause is to protect the interests of the parties, as it helps
to prevent the parties from inadvertently waiving their contractual rights through their
actions. Basically, the non-waiver clause makes sure that if parties fail to exercise their legal
rights or delay in exerting their legal rights, that does not imply a waiver of those rights or
loss of remedies.

Types of waiver clauses

Here are the several types of waiver clauses that can be seen in many agreements:

 No General Clause- In this type of waiver clause, the party should inform the other
party that they are waiving this particular right, but that does not mean that the other
rights are also being waived.

Sample Clause- “A party’s failure to perform any clause or implement any rights under the
agreement at any time shall not impair the party’s right to request performance, nor shall
any party’s waiver of a violation be considered a waiver of any subsequent breach”.

 The Course of Dealing Waiver Clause – Under this kind of waiver clause, if a party
partially waives a right today that does not mean that the right is waived completely.
The party can exercise that right in the future with the same party.
Sample clause: “No Secured Party shall by any act of delay, indulgence, omission, or
otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in
any default or event of default.” 

 Written Waiver Clause- In this type of waiver clause, unless the party puts a waiver in
writing and signs it, the party will not be able to enforce it.

Sample Clause- “A waiver or non-performance of an obligation under the agreement would

only be valid if it is in writing and signed by the person authorising the waiver.”

 The Complete No-Waiver Clause- this type of waiver clause is the combination of all
the types of waiver clause, the affirmative waiver, the general waiver, the written
waiver and the course of dealing waiver into a single clause.

Sample Clause- “A failure or delay in imposing a duty or exercising a right or remedy does
not mean that the obligation, right, or remedy has been waived. A waiver of a violation of
one provision in the agreement does not imply a waiver of any other term in the agreement.”

What is the statutory obligation of the no-waiver clause?

The statutory obligation of the waiver clauses is mostly not enforceable. Even if an
Agreement has a complete non-waiver clause, as the court thinks that the party has waived its
right to enforcement if the party has demonstrated extreme behaviour. In case of Hovnanian
Land Investment Group, LLC v. Annapolis Towne Centre to Parole, LLC the Maryland Court
concluded that, in certain circumstances, the terms of the contract may be waived by actions,
statements etc. by the parties without a written waiver even when the contract in question
contains a no-waiver clause. In the case of  Gail (India) limited v. Newton Engineering &
Chemicals, the Court said that if the party has breached the contract, then the No-Waiver
clause will not protect the party from paying the damages.

Limitations of a no-waiver clause

The drawback that comes with that notice is that, if an innocent party fails or delays in
enforcing its right, it will likely mean that the innocent party will be prevented from using or
doing so in the future. Irrespective of the fact that the agreement contains a non-waiver
clause.

As in the recent case of UK, the court found that a party has