Clark v. West

New York Court of Appeals · 1908 · Contracts

ContractsWaiverConditions PrecedentForfeiturewaivercondition precedentforfeitureexpress waiver

Facts

The parties contracted for the plaintiff to write books for the defendant at $6 per page, except that if the plaintiff failed to totally abstain from intoxicating liquors during the work, he would receive only $2 per page. The plaintiff wrote a book under the contract, the defendant accepted and published it, and the plaintiff admitted he had not fully abstained from liquor while writing it. He was paid only $2 per page, but alleged that the defendant, with full knowledge of his drinking, repeatedly represented that he would still receive the additional $4 per page and that both parties understood he remained entitled to it. The plaintiff sued on the theory that the defendant had expressly waived the abstinence condition.

Issue

Was the contractual requirement that the plaintiff totally abstain from intoxicating liquors a waivable condition precedent rather than part of the contract's consideration? If so, did the complaint allege facts sufficient to show an express waiver by the defendant, despite the absence of new consideration?

Rule

When a contract term is a condition precedent affecting the manner of performance and operating as a forfeiture provision, rather than the consideration or subject matter of the contract itself, that condition may be expressly waived by the party entitled to insist on it without any new consideration. Waiver is the intentional relinquishment of a known right; if a condition is waived, the forfeiture dependent on that condition falls with it, though the nonbreaching party may still counterclaim for any damages caused by the breach. Mere acceptance of performance that the party was obligated to accept does not by itself imply waiver where only an express waiver is alleged.

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In Seattle, Nora Benton contracted with Alder House Publishing to prepare a six-volume study guide. The agreement set compensation at $900 per chapter, but stated that if Nora failed to submit weekly source logs during the project, she would receive only $300 per chapter. Midway through the work, Alder House learned she had stopped sending the logs and repeatedly told her she would still be paid the full rate if she completed the manuscripts.

If Nora sues for the unpaid balance after the publisher pays only $300 per chapter, which is the strongest argument for Nora under the governing rule?

Explanation. The majority rule is that when a term is not the consideration or subject matter of the bargain itself, but instead a condition precedent concerning the manner of performance whose breach causes a forfeiture, the party entitled to insist on it may expressly waive it without new consideration. Repeated assurances with knowledge of the breach can establish such a waiver. Mere completion of the work does not automatically erase payment terms, and acceptance alone is not enough where the theory is express waiver.