The knowledge element of waiver by election in commercial contracts (URE Energy Ltd v Notting Hill Genesis)
Commercial analysis: The doctrine of waiver by election holds that, in a situation where a person is entitled to alternative rights inconsistent with one another and, with the knowledge of the relevant facts, acts in a manner which is consistent only with his having chosen one of those rights, the law holds him to his communicated choice. Election generally requires knowledge of the facts giving rise to the choice. In Peyman v Lanjani, the Court of Appeal held that it also requires knowledge of the legal right being waived. In URE Energy Ltd v Notting Hill Genesis, the Court of Appeal considered the important question of what knowledge is necessary where the right arises under the express terms of a signed contract. Is the waiving party deemed to have knowledge of those terms (so that actual knowledge of them does not have to be expressly proved)? Written by Seb Oram, barrister at International Construction Chambers.