Waiver

How BC law treats it

In Saskatchewan River Bungalows Ltd v Maritime Life Assurance Co, [1994] 2 SCR 490, the Supreme Court of Canada held that waiver requires full knowledge of the right and an unequivocal and conscious intention to give it up. Waiver can be express or inferred from conduct. A party that has waived a time requirement can usually reinstate it by giving reasonable notice before relying on it again. Waiver of breach or default often arises in loans, leases and supply contracts. A landlord who keeps accepting rent knowing of a tenant's breach may be found to have waived the right to forfeit the lease for that breach. A lender who repeatedly accepts late payments may need to give notice before insisting on strict compliance. Waiver of a past breach does not usually waive future breaches. Most commercial contracts contain a no-waiver clause. It says that delay or failure to enforce a right is not a waiver, and that a waiver is effective only if in writing and signed. Courts generally respect these clauses, though conduct can still support estoppel in some cases. Waiver of appeal is different. A party can give up a right of appeal by agreement, for example in an arbitration agreement, or by conduct such as accepting the benefit of a judgment. A waiver of liability, or release, is a separate instrument that gives up the right to sue.

What it means for your business

Informal flexibility is common in business, but it can cost a party its rights. Letting a customer pay late month after month, or accepting deliveries that do not meet the specification, can make it harder to enforce the contract strictly later. A business that wants to stay flexible without losing its rights should confirm in writing that the indulgence is a one time accommodation, rely on a no-waiver clause, and give clear notice before reinstating strict deadlines. Example: A Langley equipment lessor accepts six late payments without complaint. Before declaring a default for the seventh, it sends the lessee written notice that payments must now be made on the due date, so the lessee cannot argue waiver.

Risks and common mistakes

Assuming a waiver must be a signed document, when conduct alone can amount to waiver. Accepting late payment or defective performance without reserving rights in writing. Treating waiver of one breach as consent to future breaches, or the reverse. Confusing a waiver of a contractual right with a release of liability. Relying on a no-waiver clause while acting in ways that support an estoppel argument.