## Facts

- In 1989, a seller agreed to sell 120 acres in Lake County, Oregon, to a buyer for $24,000 under a land sale contract with installment payments.
- The contract required the buyer to pay real property taxes and provide tax-payment receipts to the seller; default could support foreclosure.
- Over several years, the buyer frequently made late installment payments, which the seller (or escrow agent) accepted, sometimes after requests for prompt payment.
- For at least tax years 1990–1993, the buyer did not pay property taxes and did not provide receipts as required.
- In January 1994, the seller sent a default letter asserting defaults for late installments and unpaid taxes, but the buyer did not receive it.
- From January to May 1994, the buyer made four additional installment payments, which the escrow agent accepted.
- The seller later filed an action to foreclose based on defaults including unpaid taxes.

## Issues

1. Whether a seller’s course of conduct accepting late performance and not enforcing related requirements can waive the right to insist on strict compliance with a buyer’s tax-payment and tax-receipt obligations.
2. Whether such waiver bars foreclosure based on the buyer’s tax defaults under the land sale contract.

## Decision

- The Oregon Supreme Court affirmed in part and reversed in part the Court of Appeals and affirmed the trial court’s judgment dismissing the foreclosure action.
- The court held the seller’s overall course of conduct waived strict enforcement of both timely installment payments and the tax-payment/tax-receipt provisions.
- Because strict enforcement of the tax provisions was waived, foreclosure based on those tax defaults was not available on these facts.

## Legal Principles

- Waiver is the intentional relinquishment of a known right and may be inferred from conduct.
- Conduct inconsistent with insisting on strict contractual performance is relevant to determining waiver, including whether waiver of enforcement of one provision supports waiver of enforcement of other provisions in the same contract.
- Waiver of one contractual provision does not automatically establish waiver of another; the determination depends on the totality of the parties’ undisputed conduct.
- Continued acceptance of performance after purported notice of default may support a finding that strict enforcement has been waived, particularly when prior conduct tolerated nonconforming performance.

## Conclusion

The court concluded that the seller’s long-term acceptance of late installment payments, failure to act on missing tax receipts over multiple years, and acceptance of payments after an attempted default notice collectively showed waiver of strict compliance with the tax-related contract terms, defeating foreclosure based on those tax defaults.


Alderman v. Davidson, 326 Or. 508, 954 P.2d 779 (Or. 1998)