Parties to contracts frequently allege that the other party has repudiated the contract by expressing an intention not to be bound by its terms and cancelling the agreement as a consequence. That step must be taken with care.

The Supreme Court of Appeal in Braun Medical (Pty) Limited v Ambasaam CC pointed out that the emphasis is not on what was subjectively intended but whether, objectively, the conduct of a party demonstrates an intention not to be bound by the contract. The perception of a reasonable person, not of the other party to the contract, is relevant.

In this case a letter accusing a party of non-performance (allegedly falsely) could not be construed as demonstrating a deliberate and unequivocal intention not to be bound by the agreement. This was especially so because there was a breach clause requiring rectification of defective performance before cancellation could follow.