Opinion ID: 848763
Heading Depth: 2
Heading Rank: 1

Heading: demonstrating waiver

Text: Both our case law and modern legal treatises recognize that parties may waive contract clauses by a course of conduct constituting estoppel. Both contemplate that a course of conduct may consist of silence plus knowledge by one party and detrimental reliance by the other over time. Our Court first considered the proofs necessary to establish a contractual waiver in Klas v. Pearce Hardware & Furniture Co., 202 Mich. 334, 168 N.W. 425 (1918). We formulated the plaintiff's burden by quoting the following among several sources as authority: Waiver is a matter of fact to be shown by the evidence. It may be shown by express declarations, or by acts and declarations manifesting an intent and purpose not to claim the supposed advantage; or it may be shown by a course of acts and conduct, and in some cases will be implied therefrom. It may also be shown by so neglecting and failing to act as to induce a belief that there is an intention or purpose to waive. Proof of express words is not necessary, but the waiver may be shown by circumstances or by a course of acts and conduct which amounts to an estoppel. 40 Cyc. p. 267. [ Klas, supra at 339, 168 N.W. 425 (emphasis added). [1] ] Modern legal treatises reflect Klas's view that silence with knowledge can form the basis of a contractual waiver by estoppel. American Jurisprudence 2d provides: [C]ontract provisions may be waived expressly or the waiver may be implied from the acts of the parties.... [O]ften [waiver] is sought to be proved by various species of acts and conduct permitting different inferences and not directly, unmistakably, or unequivocally establishing it, in which case it is a question for the jury. An implied waiver exists when there is either an unexpressed intention to waive, which may be clearly inferred from the circumstances, or no such intention in fact to waive, but conduct which misleads one of the parties into a reasonable belief that a provision of the contract has been waived. [17A Am. Jur. 2d, Manner of waiver, in general, § 656, 663 (1991).] Williston provides: [S]ilence or inaction which is coupled with knowledge by the party charged with waiver that the contract's terms have [not] been strictly met, and detrimental reliance by the other, for such a length of time as to manifest an intention to relinquish the known right, may result in a waiver of rights under the contract. [13 Williston, Contracts, Silence, Inaction or Forbearance, § 39.35, p. 653-654 (2000).] This Court should retain the waiver burden set forth in Klas and in modern legal treatises. The inquiry into whether a written contract provision has been waived should be directed to the parties' words and behavior that are alleged to demonstrate a revised agreement. Accordingly, I would allow a court to find waiver on the basis of knowing silence, in accordance with the standard set forth in American Jurisprudence 2d: An implied waiver exists when there is either an unexpressed intention to waive, which may be clearly inferred from the circumstances, or no such intention in fact to waive, but conduct which misleads one of the parties into a reasonable belief that a provision of the contract has been waived. [17A Am. Jur. 2d, Manner of waiver, in general, § 656, p. 663 (1991) (emphasis added).]