Waiver Evermore

Can an antiwaiver provision itself be waived? In Gould v. Corinthian Colls., Inc. (2011) 192 Cal.App.4th 1176, the court answered yes (“we conclude the lessor waived certain rights under the lease, even if the antiwaiver provision applies'').

Waiver is an intentional relinquishment of a known right, which may be implied through conduct manifesting an intention to waive. Acceptance of benefits is conduct that supports finding a waiver. The court decides whether a waiver occurred-not the jury.

Gould involved a commercial lease dispute. There, the tenant exercised an early termination right that required payment of $273,000. The tenant paid $256,000 and directed the landlord to apply a portion of its security deposit to cover the balance. The landlord kept the $256,000. But then sued for a declaration that the tenant did not properly exercise the termination right because it was not entitled to apply its security deposit to the termination payment and thus the lease remained in effect.

The lease contained language that the security deposit could not be used for prepayment of any monies due under the lease and anti-waiver language to the effect that acceptance of less than the amount due would not constitute a waiver of the balance of monetary obligations due under the lease.

Notwithstanding the antiwaiver language, the trial court held that the landlord waived strict performance of the early termination provision by keeping the $256,000. The court of appeal affirmed. The court stated that “for the [landlord] to keep the money and claim it does not constitute waiver is absurd, not to mention unconscionable.”

There you have it. You can waive a clause prohibiting waiver, or as some would say, you can’t have your cake and eat it too.