Opinion ID: 1925272
Heading Depth: 1
Heading Rank: 4

Heading: Waiver of the Financing Contingency Clause

Text: In addition to arguing that appellants failed to fulfill their implied obligation under the financing contingency clause to make a good faith effort to seek the specified financing, appellants argue that appellants waived the financing contingency clause by telling appellants' real estate agent, that the loan's in place. We reject this argument because the record does not contain any evidence tending to show that the agent ever related the substance of this comment to the appellees, directly or indirectly. It is well-established as a general rule that the parties [to a contract] by their conduct may waive the requirements of [the written contract]. Questar v. Pillar, 388 Md. 675, 686, 882 A.2d 288, 294 (2005) (alterations in original) (quoting University Nat'l Bank v. Wolfe, 279 Md. 512, 522, 369 A.2d 570, 576 (1977)). A performance condition created by a financing contingency clause in a real estate sale contract may be waived by the party for whose benefit the condition was made. Traylor, 273 Md. at 688, 332 A.2d at 674-75. Waiver, in general, is `the intentional relinquishment of a known right, or such conduct as warrants an inference of the relinquishment of such right, and may result from an express agreement or be inferred from circumstances.' Creveling v. GEICO, 376 Md. 72, 96, 828 A.2d 229, 243 (2003) (quoting Food Fair v. Blumberg, 234 Md. 521, 531, 200 A.2d 166, 172 (1964) (citations omitted)). A waiver of a contractual provision must be clearly established and will not be inferred from equivocal acts or language. Questar, 388 Md. at 687, 882 A.2d at 294. Canaras v. Lift Truck Services, Inc., 272 Md. 337, 322 A.2d 866 (1974), is instructive on the waiver issue presented in the case sub judice. Canaras involved a dispute over an employment contract. Id. at 339, 322 A.2d at 867. The employment contract at issue provided for a one year term of employment commencing on December 1, 1971. Id. at 340-41, 322 A.2d at 868. The contract also contained a renewal option, which, if exercised, would give rise to an addition five year term of employment. Id. at 341, 322 A.2d at 868. The renewal option provided that the renewal would be effected automatically unless the employee was given written notice of the employer's intention not to exercise the option at least nine full months prior to November 1, 1972. Id. Because of reluctance on the part of the employer to enter into the contract, it was not executed until May 18, 1972, after the time period specified in the renewal provision for the employer to notify the employee of its intention not to exercise the renewal option had expired. Id. at 341-42, 322 A.2d at 868-69. The employee, Canaras, argued that the employer, Lift-Truck, had waived the provision in the contract permitting it to avoid being bound to the additional five year term by executing the contract after the time for providing written notice of its intention not to renew had passed. Id. at 357, 322 A.2d at 877. We rejected Canaras' implied waiver argument. Id. In discussing the requirements for finding of an implied waiver, we drew on Williston, who said that a waiver may result from implication and usage, or from any understanding between the parties which is of a character to satisfy the mind that a waiver is intended. 5 Williston, LAW OF CONTRACTS § 678 (3d ed.1961), quoted with approval in Canaras, 272 Md. at 360-61, 322 A.2d at 879. Following this, the Court explained its rationale for rejecting Canaras's waiver argument, noting that [t]here was no evidence offered that at the time the contract came to be executed  or thereafter  the principals of Lift Truck made any statements to Canaras, nor is there any evidence of any conduct on their part from which it could be said that there was an intentional relinquishment of the rights [under the renewal option]. Canaras, 272 Md. at 361-62, 322 A.2d at 879. Similar reasoning resolves the waiver issue in the present case. Appellees' waiver argument rests solely on evidence that appellants told Ms. Weingartner, their real estate agent, that the loan's in place. Thus, in the absence of any evidence tending to show that Ms. Weingartner subsequently relayed this statement to appellees, no rational trier of fact could conclude that there was an express agreement between the parties to waive the financing contingency clause, because no such agreement could have been reached without some manifestation on the part of appellants to the appellees. Nor, following Canaras, could any rational trier of fact conclude that appellants' statement to Ms. Weingartner, standing alone, constituted an implied waiver, as this likewise would have required some manifestation on the part of appellants to the appellees, without which there could be no understanding between the parties that the appellants intended to relinquish the right to avoid their contractual obligations if they could not obtain financing. See also BarGale Indus. v. Robert Realty, 275 Md. 638, 645, 343 A.2d 529, 534 (1975) (holding that acceptance of a mortgage commitment for less than the amount specified in the contract was a waiver of that condition and a manifestation by the promissor to forego the benefit of that condition (emphasis added)). Therefore, the grant of summary judgment in favor of the appellants on the waiver issue was proper.