In finance, a waiver refers to an agreement between a lender and borrower in which the lender agrees to temporarily waive or suspend a borrower’s obligation to make a payment or comply with certain terms of a loan agreement.
This is usually done in situations where the borrower is experiencing financial difficulty or is unable to meet their financial obligations, and the lender agrees to provide temporary relief from the terms of the loan.
For example, a lender may agree to waive a borrower’s requirement to make a monthly loan payment for a period of time or to temporarily waive certain loan covenants or requirements.
Waivers in finance are often negotiated on a case-by-case basis and can help borrowers avoid default or bankruptcy while they work to improve their financial situation.
A waiver is a legal way to cancel a debt.
A waiver can be made by the debtor, or by both the debtor and the creditor.
A waiver can be made through any of these acts:
- The debtor makes an agreement with the creditor to pay only part of what he owes on a specific date in exchange for some kind of benefit
- The creditor agrees not to sue or collect because he wants something else from the debtor.
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