Business Law

Understanding Contract Terms (Post 12): The Waiver Clause

We continue the Understanding Contract Terms series by explaining waiver clauses. Most contracts include some form of a waiver clause. Waiver clauses are important to understanding when contract provisions can be enforced and when certain actions may forfeit your rights under the contract.

What is a waiver clause?

In basic terms, the word “waive” means to give up a right or interest by choosing (intentionally or not) to let the opportunity to enforce the right or interest pass. Simply put, to waive something means to not enforce it.

Waiver clauses, then, are clauses in a contract that govern (1) how a party to the contract can waive a right and (2) what happens when a party to the contract waives the right.

To highlight how a...

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Contracts

How to Position Yourself to Win a Contract Dispute

Yesterday the Washington Court of Appeals released an opinion providing a good example of how you can position yourself to win a contract dispute. The opinion affirmed a summary judgment awarding more than $300,000 plus fees and interest to GLV International, Inc. against American Rodsmiths, Inc. and its president Robert Scherer.

The Facts of the Case American Rodsmiths purchased more than $300,000 in goods from GLV. American Rodsmiths then failed to pay its outstanding balance. GLV extended credit to American Rodsmiths based on a personal guaranty from the company president, Mr. Scherer. The personal guaranty included a provision awarding attorney fees to GLV if it prevailed in a suit against Mr. Scherer to enforce the terms of the personal guaranty. GLV offered...

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Contracts

Understanding Contract Terms (post 6): Arbitration

As is the case with all the terms we discuss in this series, you have likely run across the term arbitration in a number of contracts. You also probably have a vague idea of what arbitration is. Today’s post will give you a better understanding of why contracts include an arbitration clause, including some of the benefits and drawbacks to using arbitration instead of the traditional litigation process.

First things first, let’s explore the definition of arbitration. Webster’s Dictionary defines arbitration as the hearing and determination of a case in controversy by an arbiter. Essentially, when a dispute arises between two parties, the case is brought before a neutral third party (the arbitrator), and each side presents its side of the...

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Contracts

Understanding Contract Terms (post 4): Force Majeure

In today’s post, we continue our series on understanding contract terms. In this fourth post, we focus on the term force majeure.

Webster’s Dictionary defines force majeure as “an event or effect that cannot be reasonably anticipated or controlled”—for example, such as hurricane, flooding, earthquake, war, riots, etc. The term is French, and is translated to mean “superior force.”

This term is included in contracts as a way to relieve each parties’ liability or obligation when an extraordinary event occurs or circumstances arise that are beyond the control of the parties and prevent one or both of the parties from satisfying their obligations under the contract. It is most commonly used in insurance, construction, and supply contracts.

Typically, the force majeure clause does...

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