27. What is “waiver” or “release” from a contract?
A waiver and a release serve to excuse one or both parties’ duty of performance.
• Waiver – When a party intentionally relinquishes a right to enforce the contract. A waiver is generally employed after a party fails to perform.
⁃ Example: Per our contract, I am supposed to paint your house, but I fail to do so in the allotted time. You grant a waiver excusing my liability for failure to perform.
• Release – When one party is relieved from her promise of performance. A release generally occurs before a contracting party has to perform.
⁃ Example: We sign a contract where you agree to pay me to paint your house by the end of the month. Before my performance is due, I explain that I do not have time to paint your house. You sign a release that frees me of my duty to paint your house.
Waiver and release are often used synonymously to refer to a single document that simultaneously relieves a party from her duty to perform and excuses a non-performance or breach.
• Discussion: What do you think is the justification for categorizing a release and waiver differently? Should the content of a release agreement be treated differently than the content of a waiver?
• Practice Question: Pam enters into a contract with Lia to perform consulting services for her business. Pam has a great deal of work and is too busy to perform the contract. She asks Lia to let her out of the contract. What is Pam asking of Lia?