Friday, August 14, 2020
With all the talk about COVID waivers, I thought it might be helpful to discuss the difference between waivers and exculpatory agreements (or agreements to waive rights). Because we refer to both as “waivers,” things can get confusing. I just wrapped up my summer trimester Contracts II course where “waivers” were on the syllabus. Waivers always cause so much confusion and I used to think that it was because we discuss them when we get to conditions (I’ll leave the confusing topic of conditions for a later post….) A waiver, of course, is an intentional relinquishment of a known right. When I discuss waivers in Contracts class, it’s in the context of waiving one’s contractual right. The party with the right may unilaterally waive it. One does not need the other party’s consent to waive a right because it is not an agreement – it’s the act of not enforcing a right arising under the agreement. Just as one may unilaterally waive a known right, one may also unilaterally retract it as long as the other party hasn’t detrimentally relied (and there’s still time to perform).
This is different from an exculpatory agreement, which is also often referred to as simply a “waiver.” An exculpatory agreement is a contract where what one party is giving up are rights that they would otherwise have in exchange for what the other party is offering. It differs from the first type of waiver (the act of waiving) because one is promising to waive the right. The waiver is the consideration and cannot be unilaterally retracted.
It wasn’t until I taught Torts that I realized the reason why some students might be confused when we discuss “waivers” in Contracts. They may be confusing “waivers” (the present act of waiving) with exculpatory agreements containing a waiver of rights as part of a bargained for exchange.
Any thoughts about waivers? I welcome comments below.