What is the Difference Between a Waiver and an Amendment?

Amendments and waivers are often used interchangeably, but they aren’t actually the same thing. In this article, we’re going to go over the difference between waiver and amendment agreements!

What Does Amendment Mean in Agreements?

An amendment describes any correction, clarification, deletion, addition, or change to an existing agreement that has already been signed. Amendments are able to alter aspects of the contract while keeping the original agreement binding.

What is a Waiver?

A waiver is a written demonstration of one party’s (the Releasor) intent to relinquish a particular legal right. The relinquishment needs to be voluntary, but it can apply to various situations. Effectively, the waiver will remove any potential liability for the other party (the Releasee).

Difference Between a Waiver and An Amendment

Waivers

The word “waiver” is a kind of umbrella term that covers multiple legal principles such as express waivers, implied waivers, and estoppel. What these principles share in common is that they all describe a situation where one party, the Releasor, voluntarily relinquishes a legal right that they would otherwise have — whether by default or contract.

Liability waivers are a common example where the Releasor acknowledges that they understand the risks associated with a specific activity and waive the right to hold the other party, the Releasee, liable in the event of injury, damages, or death.

Certain contracts may have a no-waiver clause in an effort to retain legal rights. However, these provisions are not always enforceable, so proceeding with caution is best practice whenever waivers are involved.

Amendments

While verbal, so-called “handshake” agreements are common, these are rarely, if ever, legally binding. This is why the majority of binding and enforceable amendments are made in writing.

Agreements with provisions against oral modifications have historically been upheld in most courts, with a decision from the Supreme Court of the United Kingdom strengthening the legal precedent (Rock Advertising Limited v MWB Business Exchange Centres Limited).

This is a testament to the importance of amending a contract in such a way that you don’t violate the original rules the agreement set or the clauses it contains. Even if both parties want to amend an agreement verbally, they can’t do this in a binding way if they have already agreed to (signed) a contract with a no-oral modification clause.

Conversely, a no-oral modification clause will not always be enforceable against verbal amendments. As such, parties should stay alert when verbally agreeing to amend an agreement, as they cannot always rely on such clauses and provisions to get the amendment thrown out in court.

Difference Between Amending and Waiving Agreements

Amending

Amending an agreement is done to improve, correct, or clarify the information in your original contract. These changes are often supplementary rather than transformative, and the underlying agreement is substantially preserved.

This is not to be confused with an addendum, a post-contract attachment. The purpose of such addendums is to modify or change terms that were established in the original agreement.

In most cases, this adds new terms to an existing agreement, which will be incorporated into the contract after all the parties agree to the addendum. Simply put, addendums add information, while amendments make changes to a pre-existing section of the contract.

Waiving

Waiving agreements means that you are voluntarily giving up your claim or rights that were outlined in the contract. For instance, you may be faced with a release of liability waiver that relinquishes your claim to sue your former employer in the future.

In exchange for signing the waiver and removing the employer from any potential liability, you would receive separation pay. Waiver clauses are also used to end agreements if one party has breached the terms of their contract. Such clauses are essential so you don’t end up stuck in an agreement with a non-compliant party.

More commonly, the release of liability waivers are used either before a risky activity or after an incident of injury and damage. For example, you might sign a release of liability waiver agreement after a car accident settlement to ensure that you will not sue the other party.

It’s worth noting that waivers will not always be upheld in a court setting depending on the context of the case and the series of events that led to the injury. For instance, if a construction company failed to provide adequate safety equipment to their employees, then a liability waiver won’t absolve them of their responsibility to keep workers as safe as possible.

When to Use Each One

Amendments

Any time the transaction or business relationship between the parties changes, the original contract should be amended as soon as possible. Whether that entails a change in the scope of work, deadline of the engagement, parties involved, or budget, it’s best practice to update this information with written amendments to ensure that your contract will be enforceable in the future. If you used PandaDoc to create your contract, then it can be legally amended at any time.

Waivers

Generally speaking, waivers should only be signed before you participate in a particular activity. If a business or insurance company asks you to sign a release of liability waiver after an injury has already occurred, then you should refrain from doing so (except in cases where an out-of-court settlement is reached).

No entity can force you to sign waivers. However, schools, hospitals, and other businesses have the right to refuse service if you do not sign a waiver, as they are within their rights to require one (and likely just trying to reduce their potential liability).

Final Thoughts

As you can see, both amendments and waivers are key tools when it comes to legal proceedings. Amendments are invaluable when it comes to clarifying and improving existing agreements while waivers are an effective way to limit potential liability.

If you need help creating legally binding digital waivers, you can try out PandaDoc Waivers here!