To Waiver or Not to Waiver, that is the Question?
In Hovnanian Land Investment Group, LLC, et. Al. v. Annapolis Town Centre at Parole, LLC the Maryland Court of Appeals held that a party’s conduct (whether express or implied) may waive a condition precedent set out in a written purchase agreement despite a specific clause in the agreement requiring that all waivers must be in writing. Relying on its own past opinions and the opinions of renown jurists, Benjamin Cardozo and Oliver Wendell Holmes, the court, quoting Cardozo, determined that “[t]he clause [in a contract] which forbids a change may be changed like any other. The prohibition of oral waiver may itself be waived.” Citing the common law rule, the court reaffirmed its past holding that the freedom to contract does not guarantee the validity of a non-waiver clause, and that “even when a contract specifically states that no non-written modification will be recognized, the parties may yet alter their agreement by [oral] negotiation.” This decision is an important reminder that actions can speak louder than words. Thus, a contracting party’s actions may result in the waiver of a contract’s express terms even with the most careful and artful drafting.
