This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
From the nature of waiver,1 it is a final renunciation of a right, and accordingly the waiver of a breach of condition is final as to a past breach,2 and the party who has waived such breach can not avoid the effect of such waiver by making restitution to the adversary party of what he has parted with in reliance thereon.3
"Whether a waiver of a past breach operates as a waiver of a future breach of the same general character, depends on whether the adversary party was misled by such waiver, and was induced to believe that such condition would not be insisted upon in the future. If the waiver of a past breach does not mislead the adversary party, it does not operate as a waiver of a subsequent breach of the same general kind.4 While the act of an insurance company in accepting a payment after the policy has expired will operate as a waiver of such default in that particular instance, it will not operate as a waiver of such conditions with reference to renewals of the policy in the future.5 Waiver of a condition against incumbrances in favor of a given incumbrance, does not operate as a waiver of a subsequent incumbrance,6 although such incumbrance is given to the same creditor.7 A waiver of a condition against incumbrances on realty is not a waiver of a condition against incumbrances on personalty which are included in the same insurance policy.8 A waiver of a condition against incumbrances is not a waiver of a condition against sale,9 although the property is sold in satisfaction of such incumbrance.10 A waiver of a condition against an absolute assignment is not a waiver of a condition requiring absolute ownership where the assignment is made to an assignee in trust.11
6 United States. Georgia, F. & A. Ry. v. Blish Milling Co., 241 U. S. 190, 60 L. ed. 948; St. Louis, Iron Mountain & Southern Ry. v. Starbird, 243 U. S., 592, 61 L. ed. 017; Olson v. Chicago, B. & Q. R. Co., 250 Fed. 372.
Mississippi. Illinois Central R. Co. v. W. J. Davis & Co., 112 Miss. 119, 72 So. 874.
Hew Jersey. Olivit Bros. v. Pennsylvania Railroad (N. J. L.), 96 Atl. 582.
Oklahoma. Chicago, R. I. & P. Ry. Co. v. Gray, - Okla. -, 165 Pac. 157; Chicago, R. I. & P. Ry. Co. v. Brock-meier, - Okla. -, :168 Pac. 1011.
South Carolina. Murray v. Atlantic Coast Line R. Co., 108 S. Car. 88, 93 S. E. 387.
Utah. Baird v. Denver & R. G. R. Co., 40 Utah 58, 102 Pac. 79.
1 See Sec. 2652.
2 Rundell v. Anchor Fire Ins. Co., 128 Ia. 575, 25 L. R. A. (N.S.) 20. 105 N. W. 112; Beanchamp v. Retail Merchants' Association Mutual Fire Ins. Co., 38 N. D. 483, 165 N. W. 545.
3 Home Fire Ins. Co. v. Kuhlman. 58 Neb. 488, 76 Am. St. Rep. Ill, 78 N. W. 936.
4 England. Panoutsos v. Raymond Hadley Corporation , 2 K. B. 473 [affirming (1017), 1 K. B. 767].
United States. Atlas Reduction Co. v. New Zealand Ins. Co., 138 Fed. 497, 9 L. R. A. (N.S.) 433.
California. Upton v. Travelers' Insurance Co., - Cal. -, 2 A. L. R. 1597, 178 Pac. 851.
Georgia. Hartford F. Ins. Co. v. Lid-dell Co., 130 Ga. 8, 14 L. R. A. (N.S.) 168, 60 S. E. 104.
Kansas. Citizens' State Bank v. Shawnee F. Ins. Co., 01 Kan. 18, 49 L. R. A. (N.S.) 972, 137 Pac. 78.
Massachusetts. Boston Co-Operative Bank v. American C. Ins. Co., 201 Mass. 350, 23 L. R. A. (N.S.) 1147, 87 N. E. 504.
Pennsylvania. Moore v. Niagara Fire Ins. Co., 100 Pa. St. 40, 85 Am. St. Rep. 771, 48 Atl. 869.
South Dakota. Smith v. Retail Merchants' F. Ins. Co., 20 S. D. 332, 42 L. R. A. (N.S.) 173, 137 N. W. 47.
Wisconsin. Hotchkiss v. Home Ins. Co., 58 Wis. 297, 17 N. W. 138.
If, on the other hand, the waiver as to a past breach is of such a character that it misleads the adversary party and induces him to believe that such conditions will not be insisted upon in the future, such waiver of a past breach operates as a waiver of a future breach of the same general character.12 If the property owner under a building contract has made payments habitually without insisting upon the approval of the architect as a condition precedent, such conduct on his part will be regarded as a waiver of such approval as to subsequent payments,13 at least if the property owner has not given fair notice to the contractor that he proposes to insist upon such condition in the future. The habitual conduct of an insurance company in accepting premiums after the time specified in the original contract for the renewal thereof, will operate as a waiver as to future payments if such custom has misled such policyholders.14
5 Upton v. Travelers' Insurance Co., - Cal. -, 2 A. L. R. 1597, 178 Pac. 851.
6 Hartford F. Ins. Co. v. Liddell Co., 130 Ga. 8, 14 L. R. A. (N.S.) 168, 60 S. E. 104.
7 Hartford P. Ins. Co. v. Liddell Co., 130 Ga. 8, 14 L. R. A. (N.S.) 168, 60 S. E. 104.
8 Atlas Reduction Co. v. New Zealand Ins. Co., 138 Fed. 497, 9 L. R. A. (N.S.) 433.
9 Citizens' State Bank v. Shawnee F. Ins. Co., 91 Kan. 18, 49 L. R. A. (N.S.) 972, 137 Pac. 78; Boston Co-operative Bank v. American C. Ins. Co., 201 Mass. 350, 23 L. R. A. (N.S.) 1147, 8T N. E. 504.
10 Citizens' State Bank v. Shawnee F. In*. Co., 91 Kan. 18, 49 L. R. A. (N.S.) 972, 137 Pac. 78; Boston Co-operative Bank v. American C. Ins. Co., 201 Mass. 350, 23 L. R. A. (N.S.) 1147, 87 N. E. 594.
11 Smith v. Retail Merchants' F. Ins. Co., 29 S. D. 332, 42 L. R. A. (N.S.) 173, 137 N..W. 47.
12 Inter-Southern Life Ins. Co. v. Duff, 184 Ky. 227, 211 S. W. 738; Young v. Hartford Life Ins. Co., - Mo. -, 211 S. W. 1; Pacific Mutual Life Insurance Co. v. McDowell, 42 Okla. 300, L. R. A. 1918E, 391, 141 Pac. 273; Pauley v. Sun Ins. Office. 70 W. Va. 187, 90 S. E. 552.
13 Lansford v. Wren, 64 W. Va. 458, 63 S. E. 308.
If the party to a contract waives a condition which is inserted for his benefit,15 such as a condition requiring the adversary party to give certain security for credit which is extended to him,16 it is held that on the one hand such waiver does not prevent the party for whose benefit such condition is inserted from retracting such waiver and electing to insist on the performance of such condition in the future; but that on the other hand he must, in such case, give reasonable notice to the adversary party of his intention to insist upon the performance of the original contract.
If a provision in a policy of insurance, requiring action thereon to be brought within a certain time, has been waived by the conduct of the insurer in treating such policy as in effect, it is held in some jurisdictions that his subsequent denial of liability operates as a retraction of such waiver to the extent that the insured must at least bring an action within a reasonable time after the insurer has denied such liability.17 In other jurisdictions, however, it is held that if such provision is waived, it is waived as a finality; and that the insured can bring an action at any time within the period fixed by the Statute of Limitations.18 This result is due in part to the fact that provisions of this sort are regarded by the courts with considerable hostility as being in derogation of the general policy of the state as expressed in its Statute of Limitations; and while, as a rule, the dislike of these covenants is not strong enough to induce the courts to treat them as invalid.19 the courts are quite willing to find that the parties have waived such provisions and that such waiver is final.
14 Pacific Mutual Life Insurance Co. v. McDowell, 42 Okla. 300, L. R. A. 1918E, 391, 141 Pac. 273.
15 Panoutsos v. Raymond Hadley Corporation , 2 K. B. 473 [affirming (1917), 1 K. B. 7671.
16 Panoutsos v. Raymond Hadley Corporation , 2 K. B. 473 [affirming (1917), 1 K. B. 7671.
17 Phillips v. Union Central Life Ins. Co., 101 Fed. 33; Goodwin v. Merchants' & Bankers' Mutual Ins. Co., 118 la.
601, 92 N. W. 894; Gilbert v. Globe & Rutgers Fire Insurance Co., - Cr. -, 3 A. L. R. 205, 174 Pac. 1161; David v. Oakland Home Ins. Co., 11 Wash. 181, 39 Pac. 443.
18 Lynchburg Cotton Mill Co. v. Travelers' Ins. Co., 149 Fed. 934, 9 L. R. A. (N.S.) 654; Philadelphia Casualty Co. v. Thacher, 236 Fed. 869; Galloway v. Standard Fire Ins. Co., 45 W. Va. 237, 31 ft E. 969.
19 See Sec. 732.