Waiver: Definition, Example and Related Terms
What is a Waiver ?
A waiver is like a promise that you won't take action on something. In the world of business contracts, it's when one party decides not to use their rights or claims over something. This decision is usually put in writing, so there's no confusion later. Imagine you're playing a game with your friends, and there's a rule you don't like. If you all agree to ignore that rule, you've basically made a waiver. In the world of business, it's a bit more complicated, but the idea is the same. It's important to remember, though, that once a waiver is signed, it's very hard to go back on it. So, it's like agreeing to ignore a rule, but then not being able to change your mind later.
Example(s)
Scenario Description Imagine you're a music artist with a record label. You've signed a contract saying you'll make three albums. But after the first one, you want to try something new. In this case, the record label might agree to a waiver. This would let you out of your contract early, so you can do something different. They give up their right to force you to make more albums, and you give up your right to have them produce your music. This would usually be put in writing, and signed by both parties. Let's say you're a software company, and you've signed a contract with a client to provide technical support. But the client has their own IT team and doesn't need your support after all. Here, the client could request a waiver for the technical support part of the contract. If you agree, then they wouldn't have to pay for the support, and you wouldn't have to provide it. Again, this would be put in writing and signed.