Supreme Court ruling on waiver clause in construction contracts explained

LiveLaw reports that waiver clauses in infrastructure contracts, such as NHAI concession agreements, often require waivers to be in writing and executed by an authorised representative. During project execution, parties frequently bypass this condition. When disputes later arise, the party claiming a breach may assert that no written waiver was given, keeping financial claims alive.

The Supreme Court in P. Dasa Muni Reddy vs P. Appa Rao held that waiver is a voluntary relinquishment of a known right requiring mutual consent. However, even without a formal written waiver, the doctrine of acquiescence applies. If a party passively accepts a benefit without protest, it amounts to implied consent. The Supreme Court in Union of India vs N. Murugesan ruled that acquiescence presupposes knowledge and creates an implied agreement.

The principle of approbate and reprobate bars a party from taking inconsistent stands. LiveLaw explains that even if a contract mandates a written waiver, a party that failed to object at the time cannot later raise a claim. Acquiescence operates outside contractual conditions and estops the party from reverting to original obligations.