A landlord and tenant enter into a lease agreement for commercial property. The lease specifies that the tenant must pay $2,000 in rent on the first of each month. For the past three months, the tenant has paid $1,800, and the landlord has accepted these payments without protest. Now, the landlord demands the full $2,000 for the upcoming month and the $600 in arrears. The tenant argues that the landlord's acceptance of the lower payments implies a modification of the contract. What legal principle might the tenant successfully argue?
- AMutual Mistake
- BDuress
- CWaiver
- DPromissory Estoppel
Show answer & explanationAnswer & explanation
Correct answer: C. Waiver
Waiver is the voluntary relinquishment of a known legal right. By consistently accepting the lower rent payments without protest, the landlord may be deemed to have waived their right to enforce the full $2,000 payment for those past months. While the landlord can reinstate the original terms for future payments (with proper notice), they may be prevented from recovering the arrears for the waived period.
Why the other options are wrong
- A. Mutual mistake involves both parties having a fundamental misunderstanding about a material fact at the time of contract formation, which is not the case here.
- B. Duress involves coercion or threat forcing a party into a contract, which is not relevant to this scenario.
- D. Promissory estoppel requires a clear and unambiguous promise, reliance by the promisee, and injustice if the promise is not enforced. While there's some overlap, waiver more directly addresses the relinquishment of an existing right through conduct.
Waiver (Contract Law)
The voluntary and intentional relinquishment of a known right or privilege. In contract law, a party's conduct, such as accepting partial performance without protest, can imply a waiver of their right to enforce the original terms of the contract for that specific instance or period.
- Must be a voluntary act or clear conduct.
- The party must have knowledge of the right being waived.
- Can be express or implied by conduct.
- A waiver of one breach does not necessarily waive all future breaches.
Memory trick: Waiver: Your silence can give away your right.