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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?
In this case, Pam is asking for a release from her obligation to perform the contract. If she has already breached the agreement (by failing to perform in a timely manner), she would be asking for a waiver of potential liability.