47.10 Legal systems do not generally object to the parties ending their contractual relationship by agreement. In essence, such agreement is nothing other than a contract to avoid the initial contract and, thus, falls perfectly within the principle of freedom of contract.
47.11 A specific case closely related to the avoidance by agreement is that of repudiation in common law jurisdictions following the English model. In these legal systems repudiation of the contract—that is a unilateral statement to the effect that performance of the contract is refused—does not suffice to bring the contract to an end. Rather, it is necessary for the aggrieved party to accept the repudiation.20
47.12 Particular problems arise where the parties do not negotiate an avoidance of the contract but instead they remain inactive for a long period of time until one party demands performance from the other.21 This will especially be the case where the market rises and the buyer consequently wishes to get the goods delivered on the original terms, thus increasing its profit on the resale in the market.22 The debate concerning this group of cases focuses on instalment contracts where the issue is most likely to arise; this is especially where the contract does not envisage specific delivery dates but where the buyer is intended to ‘call off’ the goods.23
47.13 There are different solutions conceivable for these scenarios. One possibility is to construe the parties’ inactivity as an implied agreement to avoid the contract altogether.24 Commonly referred to as ‘abandonment’, there appears to be some divergence amongst common law systems. The difficulties with abandonment naturally arise from the fact that such agreement would still have to meet the general requirements established by the rules on contract formation.25 Classifying the mere inactivity of the parties as legally relevant declarations leading to a binding agreement does not sit comfortably with the otherwise established principle that silence is typically not of relevance.26
47.14 Australian courts, seemingly more so than other jurisdictions, have demonstrated a preparedness to infer that the parties, by their conduct, have discharged their contract by an abandonment agreement.27 The inference that the parties do not wish to proceed must be a clear one.28 Because that agreement is an inferred one, it is said that it does not need to follow the traditional offer and acceptance model, nor do the subjective intentions of the parties play any part.29
(p. 762) 47.15 Some of the more recent statements under English case law30 have suggested that there was an implied term to the effect that where the buyer does not call for delivery of the goods within a reasonable period of time, delivery lapses.31
47.16 In civil law jurisdictions such situations may be solved by making use of the principle of venire contra factum proprium. These systems typically are familiar with the general requirement of good faith. In other words, where a party was inactive and has created the reasonable assumption of the other party that it is no longer interested in the contract, that party displays contradictory behaviour when it suddenly wishes to go through with the contract. The obligee will be prevented from doing so in particular where the obligor has reasonably relied on the obligee’s inactivity and is now prejudiced, for example because it has sold the goods elsewhere.
47.17 Whether solving these cases in common law jurisdictions by the parallel concept of estoppel is possible remains disputed. Some court statements were affirmative in this regard, especially where the obligor had already relied on the obligee’s inactivity and changed its position.32 Yet, there is also a strong view which contends that the mere inactivity of both parties does not allow for a sufficiently conclusive inference of estoppel.33 Another solution advocated by courts and commentators operates with the concept of repudiation and its acceptance.34 The starting point is to hold the buyer to be under a duty to request delivery within a reasonable period of time.35 Failing to do so, the buyer commits a repudiatory breach which is—and may be—accepted by the seller without communication but by its own inactivity.36