To Abide or Not to Abide
In November 2023 the tenant of a Pretoria shop handed back the keys and walked away from a lease that still had seven years to run. The landlord refused to take them. For nine months the shop stood dark while the rent ran on against a tenant who was gone, and this April a court ordered that tenant to pay every month of it. The tenant was surprised. The better question is why the landlord, who could have put a new tenant in the space within weeks, chose to leave it empty.
Being walked out on is one of the more serious things that can happen to you in business, and the law’s response to it surprises people too. It does not rush to your aid. It hands you, the wronged party, a decision, to hold the other side to the contract or to end it, and then it stands back, enforces whatever you decide, and offers no opinion at all on what you should do. How that decision gets made, under pressure, in anger, and with real money moving, is what this article is about.
To Abide or Not to Abide
The choice the law gives you but will not make for you
The Romans had a word for the most drastic thing one person can do to a bond. Repudium was the notice by which a husband cast off his wife, and the etymologists still quarrel over its root, shame (pudere) or the foot (pedis), so the word carries both the disgrace and the kicking away. Centuries later, when the law of contract needed a name for the same gesture, it understandably reached for the same word.
In November 2023 the tenant of a shop in a Pretoria shopping centre performed the gesture in its modern form. A national pharmacy chain had opened close by, the trade the business was built on had quietly followed it, and the tenant was done. It moved out its stock and threw the keys at the landlord. Not literally, one assumes, but handing back the keys to a lease with seven years left to run is the same throw in slower motion.
The landlord’s response is the reason the case is worth telling. It let the keys lie. It did not accept them, did not relet the shop, did not sue for damages. It held the lease in force and let the rent run against a tenant who was gone. Only nine months later did it cancel and claim the arrears, R329,349.94, and in April this year the court gave judgment for every rand of it, with interest and costs.[1]
Late payment, defective work and missed deadlines are breaches, and contracts and the law carry everyday machinery for them, notices, demands, time to put things right. A thrown set of keys is different in kind. It announces, more plainly than any letter, that the tenant no longer considers itself bound at all. That is repudiation. The dealbreaker is not performing badly. He is casting the deal itself away.
Here the law springs its surprise, because when it borrowed the Romans’ word it reversed the mechanism. The husband freed himself by walking. The contracting party frees himself of nothing, since nobody gets out of a contract by throwing the keys hard enough. A repudiated contract remains a contract, and the choice of what happens next passes wholly to the party left behind. She may accept the repudiation, pick the keys up, cancel and claim damages. Or she may reject it, leave them lying, hold the contract in force and insist on performance. Lawyers call that choice an election. Once made it is binding, and it cannot be reversed without the other side’s agreement except in narrow circumstances. On the only question that matters, which of the two to take, the law says nothing at all. The man who walked has made his decision and is finished with it. Everything now rests on the party he walked out on, who must make a commercial judgement inside legal boundaries, usually in a hurry, and then live with it for years. How well that goes depends less on the lawyering than on whether it was made on the right questions, and in the right order.
Are you sure it is a repudiation?
The legal question comes first, alone, and before any commercial one, because everything that follows collapses if it is answered wrongly. Not every hard line is a walkout. A party may refuse a demand because the contract does not entitle you to make it. He may cling to a reading of the contract that happens to suit him, which is not a crime but a negotiating position. He may be slow, difficult and infuriating without ever crossing the line, and for all of that the answer is the ordinary machinery of breach, not cancellation.
In the heat of the legal battle, a man standing on his rights and a man abandoning his obligations can look almost identical. Everything depends on telling them apart. Our courts do not ask what the other party privately intended, intention being cheap and the evidence of it self-serving. They ask what his conduct would tell a reasonable person in your position, and the conduct must show clearly that he does not consider himself bound.
The consequences of misreading it are not symmetrical. Read a true repudiation too generously and you lose time and money. Treat ordinary friction as a repudiation and cancel, and it is you who has walked away from the contract, with the remedies you thought you were exercising now in the other side’s hands.
I know how thin this margin is because I have stood on it for a client. I cancelled on two grounds and was told by the arbitrator, much later, that one of them was no repudiation at all. We survived on the other. The margin is thinner than anyone likes to admit, which is why this first question deserves cold, senior advice before anything else is discussed.
What does holding on cost?
Suppose the answer comes back that it is a repudiation. The election now offers you two responses, and the first is the one the Pretoria landlord chose. You reject the repudiation. You leave the keys lying where they were thrown and you tell the other side, in effect, that its walking away is not accepted, that the contract stands, and that you require it to be performed, the shop occupied, the rent paid, the goods delivered, whatever the bargain was.
Nothing about this is passive. The contract stays alive in both directions, which means your own obligations stay alive with it, and you must remain ready and able to perform them for as long as you hold the line. And the other side, which has already told you what it thinks of the deal, acquires no new enthusiasm for it merely because you have asked again.
The cost if you make this choice is the waiting itself, and it deserves to be counted like any other investment. While you hold the contract open you are financing the standoff out of your own cash flow. The premises stay reserved for a tenant who is not trading, the plant stays committed to a buyer who is not lifting, the people stay hired for a project that is not proceeding. Every month has a number attached to it, and the number comes out of your pocket until the day the other side performs or a court makes it pay. Anyone advising you to stand firm should be asked, politely, who is funding the firmness and for how long?
Seen properly, the landlord’s choice was harder than the judgment makes it look. A dark shop in a shopping centre is not a neutral fact. It drags on the centre’s takings, it discourages the tenants on either side of it, it looks bad, and for as long as the lease stands the landlord cannot put a better tenant into the space. Holding on meant gambling the slow recovery of rent from a departed tenant against the faster cure of a new one, and the law offers no bonus for winning that gamble. The most the landlord could ever collect was the rent it was owed in the first place.
Why then hold them to the contract? Because of what the two courses produce. Hold the lease and the rent accrues as a debt, a fixed number that needs no proving beyond the lease itself. Cancel and relet, and the claim becomes one for damages, the shortfall between the old rent and the new, to be proved, argued and reduced. Our law expects a party claiming damages to take reasonable steps to contain the loss, a duty that attaches to the damages claim rather than to the election itself, but it shadows the choice. This landlord had done the arithmetic. The sureties behind the tenant were worth suing, the empty months were affordable, and a certain debt was better than an arguable damages claim. On different facts, with a weaker tenant or a stronger letting market, every one of those factors turns the other way.
What would the claim be worth?
The second response is cancellation, and it feels cleaner. It ends your own obligations, it releases the shop, the plant, the capacity for better employment, and it suits the mood of the moment, because it looks and feels like consequence. But cancellation is an exchange, not an exit. You give up the performance you contracted for and you receive in its place a claim for damages, and the claim is a lesser thing. Our courts are conservative. The loss must be proved strictly, it is measured against the market as the repudiation left it, and the party you sue must still be worth suing when judgment finally arrives, which can be years away. A good claim against an empty company is worth nothing.
There is a further limit, and it decides what kind of loss you can count on. Losses that follow naturally from the breach are recovered almost as a matter of course. The profits you would have made further downstream are a different animal, recoverable only in narrower circumstances, and exactly the kind of loss that contracts habitually exclude. The Supreme Court of Appeal gave a costly demonstration of this last year in the case of Twenty-Third Century Systems v SAP.[2]
A technology company whose distribution arrangement had been repudiated accepted the repudiation, cancelled, and sued for the profits it had lost, which was the natural instinct and, no doubt, the whole point of cancelling. The contract it had just cancelled excluded liability for lost profits and required any claim to be brought within a year, and the court held that both provisions survived the cancellation. Cancelling ends the deal. It does not release you from the terms you agreed for the fight that follows.
Read those terms before you elect and not after, because they set the ceiling on what cancelling can deliver, and a party who cancels expecting more than its own contract allows has made the decision on a number that was never on offer.
How do you decide under pressure?
The week in which this decision is made is a bad week. There is anger in the building, the other side is writing self-serving letters for a future court file, and everyone from the accountants to the shareholders has a view. Nobody is at their best in that week, least of all the wronged, which is exactly when the order of the questions matters most. The decisions that hold up afterwards are the ones made in a fixed order, and the legal question comes first, by itself. Is this conduct a repudiation, read the way a court will read it, coldly and from the outside? That question has a right answer, it can be had quickly, and until it is in hand nothing commercial should be decided at all.
Then come the questions that belong to the business, and they deserve an unhurried hour, not a line in a memo. What does a month of holding on actually cost, counted honestly, premises, people, capital committed, opportunities passed over, and how many such months can the business fund without wounding itself. If performance eventually came, late and from a counterparty who has already tried to leave, what would it still be worth, because a deal performed by the reluctant is rarely the deal that was priced. If you cancelled instead, what would the market pay today for whatever that frees, the space, the stock, the capacity, and is today’s market kinder or crueller than the one the contract was written in. What do the contract’s own terms allow you to recover, and what have they quietly excluded. And behind every claim, whose balance sheet are you actually looking at, because litigation is a means of collection, not a source of money.
Then make the decision, because the election is not open forever. This is the step at which good companies stumble, and not from stupidity but from hope. The months drift, the invoices keep going out, the other side keeps being asked to reconsider, and one morning the conduct itself has answered the question, because a party who carries on performing and demanding performance has, in the law’s eyes, elected to hold on, whether or not anyone ever signed a resolution to that effect. Our law is not merciless about this, and a party who held on in good faith may still cancel later if the repudiation persists, but that is relief for the patient and not a plan.
The parties who come out of these episodes well are not the ones who guessed the market right. They are the ones who can show, afterwards, that on a known set of facts they made a deliberate decision at a known time, and then acted in line with it, every letter, every invoice, every meeting consistent with the choice. Courts respect that record. So, in my experience, do opponents.
Which brings me back to the shop. For nine months the keys lay where they had been thrown, the windows dark, the stock gone, rent accruing on paper against a tenant who had moved on. To anyone passing it looked like stubbornness. It was arithmetic. The landlord knew what the lease entitled it to, knew who stood behind the tenant’s signature, and knew it could carry the empty months while the sums ran in its favour. The tenant, I suspect, believed the throw of the keys ended the matter. It ended nothing. It only moved the decision to the other side of the deal, where it was made better.
The dealbreaker knew where he stood the day he walked.
How soon you know is up to you.
Written by:
Wessel Badenhorst
October 2026
[1] Freestone Property Investments (Pty) Ltd v Junxion Tramshed (Pty) Ltd and Others (2024-085265) [2026] ZAGPPHC 324 (8 April 2026).
[2] Twenty-Third Century Systems (Pty) Ltd v SAP Africa Region (Pty) Ltd [2025] 3 All SA 62 (SCA) (30 April 2025).
