Change of position
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A bogey-phrase you may encounter should you be in the habit of waiving your contractual rights?
The person who asks “why would anyone be in the habit of waiving their contractual rights?” obviously does not know many credit officers, and therefore may also be prone to ask things like “why would anyone insist on having contractual rights they have no practical ability to enforce or real intention of using?”
For now, while you familiarise yourself with the arcane traditions of the Worshipful Guild of Credit Analysts, imagine that there are times that you might, say, waive a NAV trigger, and you must therefore be fearful of the ongoing consequences for your economic rights if you do. There is more to say about in our waiver by estoppel article and, for you Americans, in our unlearned piece on course of dealing in the UCC, but for here we are concerned with the principles of equity administered by the Courts of chancery. They will say this:
If a fellow makes a statement pregnant with implication — for example, “I promise I will not exercise my rights against you, sir —” then, by itself (and without consideration) that statement won’t change my contractual rights against you, but it might in equity if you change your position in reliance upon it. - If, on reliance on my statement, you then put the money you had set aside for me into (say) an illiquid investment - then you have changed your position in reliance on my representation. English principles of equity may apply to change my rights to claim that money from you, especially if I knew you intended to change your position if I waived the payment. - If, on the other hand, you do nothing – you keep the money in a call account – then you have not changed your position in reliance on my representation. If I later ask for payment, there is no equitable grounds for to justify you not paying. (though perhaps you may be entitled to a reasonable additional time to make the payment).