When you agree to “waive” a provision in a contract, it means you’re giving up the rights and opportunity to enforce it. Waiver clauses are common in contracts like client services agreements (CSAs) as they can impose certain limitations in the event of a contract breach.
The Importance of a Well-Drafted Contract
Your contract serves as the roadmap for any issue that may arise during the tenure of your relationship with your client, so it’s imperative that it’s well-drafted to meet your needs if, and when, it needs to be enforced.
The specific language within a document like a CSA will make a big difference when it comes to your rights. Whether you are the service provider or signing the contract as the client, it’s imperative that you never sign it without fully understanding what rights you will be waiving when you agree to the contract.
Understanding the Waiver Clause
When you include a waiver clause in your contract, it’s advisable to stick to enforcing it. We know that sounds obvious, but the reality is if, as the service provider, you elect not to include a waiver clause or if you choose to enforce it selectively, it may complicate things down the road. Once you start to waver on the waiver (pardon the pun), it can be more difficult to convince a court to enforce it if an issue arises.
In general, it’s best practice to include a waiver clause in your CSAs to avoid misunderstandings and ensure all parties are crystal clear on what is and is not allowed under the agreement. Usually both parties of a contract will benefit in the long term if they have a good understanding of what they are and aren’t allowed to do under the agreement.
Moreover, if you’re the party who can enforce a right, you should include a waiver clause to ensure that you won’t unintentionally lose your ability to do so in the future.
Understanding the Damage Waiver Clause
A specific type of waiver often included in contracts is a damage waiver. This type of waiver generally puts limitations around who is responsible for damages caused by a contract breach. Being explicit about who will pay for losses as a result of a breach is essential if you want to be able to enforce the contract in court.
With any kind of contractual agreement, it’s important to be thoughtful as you determine which rights you (or your client) are willing to forgo as you draft a waiver and damages clause for your CSA and other contracts and agreements.
Our experienced attorneys at Sirulnik Law can help make these important determinations based on your business goals. Contact us today to discuss your needs and how to best protect your business interests.