If two parties sign an agreement and one party can prove that the other party did not demand that the terms be enforced when it could have, can the other party argue that the entire contract is void and unenforceable because the parties never intended to enforce it in the first place or due to waiver? For example, an employee was initially hired for a one year term at $50 an hour after which the employee transitioned to an at will employee. The employee continues working for the company for several years. After a few years the company renews the employees contract for 8 more years at $75 an hour but continues to pay the employee $50 an hour and the employee never demands the higher salary. Let's further assume that the second contract contains several other benefits for the employee but the employee continues to act as if the first contract is in force. For example, the first contract did not provide dental insurance, the second one did and the employee never demanded dental insurance. Suppose the second contract contains certain provisions that the employee wishes to enforce during his 7th or 8th year of employment. Can the employer argue that the entire contract is null and void since the employee never enforced the other provisions of the contract? Can the employer argue that the employee "waived his right" to the second contract by not enforcing it and acting as if it never existed? Are there any case precedents that can be applied to prove either way?
asked Jan 12, 2023 at 23:51 601 6 6 silver badges 19 19 bronze badgesDoes a contract become null and void if some or most of its terms were not followed by one (or both) of the parties?
No. Parties' temporary or systematic waiver of their contractual rights does not alter the validity or terms of that contract. Parties entitled to resume enforcement of their rights anytime. A party's noncompliance with his obligations gives the counterparty a viable claim of breach of contract, although the proper approach would be to first try to solve the dispute outside the court.
In the employment scenario you describe, the employee is entitled to --at least-- back pay as per the second contract (the difference between $75 and $50) subject to the statute of limitations, which under NJ is six years for contract disputes. See Hagans v. Nickerson, Superior Court of NJ (Oct. 2022), (citing NJSA A:14-1(a)). This precludes the recovery of some of the back pay if "the employee wishes to enforce during his 7th or 8th year of employment". A "retroactive" enforcement of other rights might be available, depending on the nature of those rights and other details. But nothing prevents the employee to henceforth enforce all of his rights pursuant to the current contract.
Can the employer argue that the employee "waived his right" to the second contract by not enforcing it and acting as if it never existed?
As explained above, no. Nor does it make sense for the employer to argue in terms of "a right to the second contract". A contract establishes a set of rights [and obligations], whence "a right to a set of rights" would reflect the employer's poor understanding of the ramifications of the contract he signed.