How to avoid waiving your no waiver clause!

Your contract or loan document may say that delay in exercising your rights shall not operate as a waiver of those rights but conduct must be consistent with this or the benefit of the clause may be lost.

Tele2 International Card Company SA and others v Post Office Ltd concerned a supply contract that included a 'no waiver' clause which said that no delay or forbearance in exercising any rights would operate as a waiver or prejudice any rights of that party under the agreement.

Tele2 breached the contract and did not remedy it. The Post Office was aware of the breach but continued to perform the contract for nearly a full year and did not contact Tele2 about the breach or reserve its rights to terminate the contract at a later date.

The Post Office argued that the 'no waiver' clause meant that only a formal waiver of its right could prevent it from terminating the contract. The Court of Appeal decided that the Post Office, by continuing with the contract without "any protest or reserve of any kind" in relation to the default, even though it was aware of the breach, meant that it had chosen to abandon its right to terminate for that breach.

This constituted a "clear and unequivocal communication, by conduct" of the Post Office's election to affirm the contract and waive its rights. On that basis, the 'no waiver clause' was of no particular help.

Case: Tele2 International Card Company SA and others v Post Office Ltd

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