What does it do?
The Waiver clause allows a party to strictly enforce its rights in terms of an agreement even if it has been lenient in the past, in other words, it confirms that leniency does not result in a waiver of its rights. This is because a party may not always want to enforce all its rights under an agreement at a point in time but do not want to lose the right to do so later.
Real life example:
Llewellyn rents an apartment to his friend Tim. Their rental agreement states that the rental must be paid on or before the 25th of the month. Tim pays late occasionally, usually around the 1st or 2nd of the month. Llewellyn overlooks this and does not mention it. Having a waiver clause in the agreement means that because Llewellyn has been lenient does not mean he cannot strictly enforce his right to payment on or before the 25th in the future or use any of the remedies in the agreement as a result of this breach by Tim.
Kleva Contracts sample wording:
No waiver will constitute a waiver of rights in respect of any later breach of the same or any other provision
What does this clause do:
One of the first questions a person entering into a contract must ask themselves is: “what happens if the other person doesn’t perform or breaks their promises?”, for example by not paying or not delivering the goods.
The parties must decide what happens if they don’t perform or perform incorrectly and set out those requirements in writing. Usually the innocent party can ask for a remedy, such as termination of the agreement, damages and so forth, or choose not to carry out their part of the agreement.
To ensure fairness, a breach clause usually includes a requirement that notice must be given to the party who is in breach and that they must be given a period of time to perform, although the parties can also agree to immediate termination if there is a breach.
A breach clause also ordinarily lists some remedies for breach like “specific performance” or a claim for damages.
Real life example:
You order 20 bags of cement from a shop, ABC Hardware, which agrees to deliver to your home. You sign their terms and conditions and agree that the deal will be cash on delivery. They deliver 20 bags and you pay them cash. After they leave you realise they have dropped off 20 bags of fertilizer instead. You read the terms and conditions and write them a letter requesting that they remedy the improper fulfilment of the agreement within seven days, failing which you are entitled to cancel the agreement and request your money back.
Kleva sample wording:
1 If any party (the “defaulting party”) fails to comply with any provision of this Agreement on time, the other party (the “innocent party”) may notify the defaulting party in writing of such failure and demand compliance by the defaulting party of the relevant provision of this Agreement within 10 (ten) days of being notified.
2 The failure to comply with any provision of this Agreement, on time, is deemed to be a material breach of this Agreement. If the defaulting party does not remedy the breach within 10 days of being called upon to do so then the innocent party can, without prejudice to its other rights:
2.1 enforce specific performance of the defaulting parties obligations in terms of this Agreement;
2.2 claim any damages it has suffered as a result of the breach by the defaulting party or,
2.3 To cancel this Agreement without prejudice to any claim it may have for damages as a result of the breach by the defaulting party”
A warranty is:
A promise in an agreement by one party to another that all matters disclosed are true and will happen.
When will you use them:
A list of warranties that each Party gives to the other is useful in an agreement as you can then hold a Party accountable if a promise turns out to be untrue or a promise made is not fulfilled.
As most agreements contain “general law stuff” or boiler plate clauses which exclude any warranties not contained in the agreement or in writing between the Parties you want to have each Party explicitly state what they warrant in writing. If a Party has made any promises to you which are not recorded in the Agreement the Party will not be obliged to fulfil them for example if when buying a car the sales person says “of course there is a service plan”, unless it is recorded it writing they won’t be bound.
Real world examples:
If you are entering into a Sale Agreement for a car you might want the seller to warrant they are the legal owner of the vehicle and/or have the right to sell the vehicle and pass ownership to you and that the car is not burdened in any way as security for a debt.
Sample wording from a Kleva Contract:
“The Seller gives to the Purchaser the following undertakings and warranties ( “the Warranties”), that:
(a) the Seller is and on the Closing Date will be able to give free and unencumbered title to Asset to the Purchaser;
- the Seller is and on the Closing Date will be the sole owner of Asset;
- the Asset is, at the Closing Date, not subject to any hire purchase or credit agreement, lease, pledge, lien, hypothec, mortgage, notarial bond or other encumbrance…”