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I'd like to put in scenario. Party A enters into a monthly payment contract with Party B. Party A pays monthly the ammount. One day, Party A is unable to pay the monthly installments. Party B says it's fine no problem, this was verbally recorded. Party A later resumes back the repayment. Months later, Party A and Party B has an argument. Now Party B wants to take legal action on Party A for the non payment several months ago. Does the original 'No Problem' good will waiver from Party B holds in court?

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Does the original 'No Problem' good will waiver from Party B holds in court?

Generally speaking, yes. Party B cannot undo his waiver unless (1) it was induced fraudulently, or (2) the contract supports striking that kind of waivers. There might be other scenarios entitling B to undo his waiver, but all of them are exceptional and don't differ that much from these two alternative conditions.

That being said, the evidence (such as the recording) should make it clear that party B waived enforcement of the timeliness of payments, not his entitlement to payments themselves.

In the event that party A has already made the payments he missed and scenario (1) or (2) applies, party B's remedies are limited to the concrete losses he incurred as a result of party A's belatedness. The principle is that remedies be available to the extent necessary to avoid injustice, as is frequently contemplated in the Restatement (Second) of Contracts.

  • Thanks for the answer! Does this also nullifies any future 'timeliness of payments'. If for example this statement is recorded: 'It's ok, we're friends. don't worry about paying on time' – user1034912 Aug 30 at 10:33
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    @user1034912 "Does this also nullifies any future 'timeliness of payments". That seems unlikely. The recording would have to strike the more reasonable presumption that parties A and B referred to A's inability to pay at the time they had that conversation. For instance, party A would have had to tell party B something like "From now on I might never be able to pay on time" prior to B's goodwill response. Or B would have had to say "Never worry if you can't pay on time". – Iñaki Viggers Aug 30 at 10:46
  • Thanks for the answer – user1034912 Aug 30 at 10:48

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