Waiver Clause

A Waiver Clause is a legal provision in international trade contracts or letters of credit whereby a party voluntarily relinquishes a certain right, claim, or defense under the contract or letter of credit. It is commonly found in sales of goods, insurance, and letter of credit transactions. Usage scenarios include: the buyer waiving the right to claim for minor defects in goods, the seller waiving the right to refuse payment for discrepancies in a letter of credit, or a party waiving the invocation of force majeure. Precautions: A waiver must be express and in writing, and must not violate mandatory legal provisions; waiving one right does not imply waiving other rights; if a waiver causes the other party to rely on it and suffer loss, estoppel may arise. Unlike a 'Force Majeure Clause,' which provides exemption from liability, a waiver clause is an active relinquishment of rights; unlike an 'Arbitration Clause,' which resolves disputes, a waiver clause directly extinguishes rights. Foreign trade practitioners should use it with caution to avoid losing important rights through unintentional waiver.