The Second Department Finds No Waiver of Contract Rights
Print Article- Posted on: Jun 13 2025
Generally speaking, a party is bound by the terms of a contract[1] to which it is a party. Wu v. Uber Technologies, Inc., 2024 WL 4874383 at *5 (Ct. Appeals of New York November 25, 2024). Thus, contracts should be enforced according to their terms when they are “clear and unambiguous”. Rocar Realty Northeast, Inc. v. Jefferson Valley Mall Ltd. Partnership, 38 A.D.3d 744, 746 (2nd Dep’t 2007) (citations omitted). This is so even when a party fails to read the contract prior to executing same (Id. at *5,*7 and *11) or if the signer does not understand the English language (Meerovich v. Big Apple Institute Inc., 22-cv-7625(DLI)(LB), 2024 WL 1308603 at *5 (E.D.N.Y March 27, 2024) (applying New York law). Thus, a “party who executes a contract is presumed to know its contents and to assent to them [and a]n inability to understand the English language, without more, is insufficient to avoid this general rule.”Holcomb v. TWR Express, Inc., 11 A.D.3d 513, 514 (2nd Dep’t 2004) (citations and internal quotation marks omitted). See also Nerey v. Greenpoint Mortg. Funding, Inc., 144 A.D.3d 646, 648 (2nd Dep’t 2016). Moreover, the ability to enforce contracts according to their terms is particularly important in many situations such as “real property transactions, where commercial certainty is a paramount concern, and where the instrument was negotiated between sophisticated, counseled business people negotiating at arm’s length.” Rocar, 38 A.D.3d at 746 (citations, internal quotation marks and ellipses omitted).
Nonetheless, a party to a contract may waive a provision thereof.[2] “A valid waiver requires no more than the voluntary and intentional abandonment of a known right which, but for the waiver would have been enforceable.” Mercado v. Schwartz, 209 A.D.3d 30, 40 (2nd Dep’t 2022) (citation and internal quotation marks omitted). Indeed, even a “no waiver” clause may be waived, although “such a waiver will not be lightly presumed….” Todd English Enterprises LLC v. Hudson Home Group, LLC, 206 A.D.3d 585, 587 (1st Dep’t 2022) (citations and internal quotation marks omitted).
Whether a party waived a contractual right was an issue decided on June 11, 2025, by the Appellate Division, Second Department, in Glopak USA Corp. v. Translink Shipping, Inc. The parties in Glopak entered into a line of credit agreement pursuant to which the defendant would loan the plaintiff money for the shipment of goods from China to the USA. When it failed to timely pay the defendant’s invoices, the plaintiff’s credit was revoked by the defendant, which also withheld (and continued to possess) the plaintiff’s shipments until all past-due balances were paid in full. As a result of the defendant’s actions, “the plaintiff commenced this action to recover damages for conversion and for specific performance, directing the defendant to accept payment for, and to release, certain shipments.”
After the defendant’s motion for summary judgment was denied by the motion court, it moved for reargument claiming that “the court misapprehended the law and the facts by determining that the plaintiff had raised a triable issue of fact in opposition by submitting evidence that the defendant had waived its right to revoke the plaintiff’s credit and demand payment in full.” The motion court granted reargument and, upon reargument, granted the defendant’s motion for summary judgment. On the plaintiff’s appeal, the second department affirmed.
In reaching its determination, the Court, relying on caselaw along the lines set forth supra, stated:
Contractual rights may be waived if they are knowingly, voluntarily, and intentionally abandoned. Accordingly, a waiver requires no more than the voluntary and intentional abandonment of a known right which, but for the waiver, would have been enforceable. Such abandonment may be established by affirmative conduct or by failure to act so as to evince an intent not to claim a purported advantage. Generally, the existence of an intent to forgo such a right is a question of fact. However, waiver should not be lightly presumed and must be based on a clear manifestation of intent to relinquish a contractual protection.
(Citations and internal quotation marks omitted.) The Court noted that the parties’ credit agreement permitted the defendant to “revoke the credit ‘at any time’ upon breach by the plaintiff.” Further, despite the plaintiff’s argument to the contrary, the Court found that “the defendant’s decision not to enforce that right until January 2020 did not constitute a clear manifestation of intent to relinquish a contractual right.” (Citations omitted.) The Court further found that the plaintiff failed to prove that its evidence “establish[ed] that the defendant waived its right to withhold shipments in the event of nonpayment.” (Citations omitted.)
Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP.
This article is for informational purposes and is not intended to be and should not be taken as legal advice.
[1] This BLOG has written numerous articles addressing various issues related to breach of contract, contract formation and contract interpretation. To find such articles, please see the BLOG tile on our website and type your search terms into the “search” box.
[2] This BLOG has written about the waiver of contract rights. See, e.g., [here], [here], and [here].
