Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Waiver

What it is:

A waiver is a party's voluntary renunciation of rights in a contractual arrangement.

How it works (Example):

When two parties enter into a contract, they often agree to forfeit some of their respective rights or claims. Either party may use a waiver -- expressed either in writing or through the performance of a specific deed -- to officially give up a privilege, right, or claim.

For example, one party might sign a waiver stating that he or she will not take legal action against the other party if there is some unintentional wrongdoing.

Why it Matters:

It is important to remember that a party who signs a waiver is surrendering his or her right to pursue a course of action (file a lawsuit, receive compensation, etc). In most cases, a party will sign a waiver only if he or she receives a benefit in exchange for doing so.