In Providence Building Services Ltd v Hexagon Housing Association Ltd [2026], the Supreme Court unanimously granted an Employer’s appeal, finding that the Contractor was not entitled to terminate its employment for repeated default.
What happened?
The sole question before the Supreme Court was whether Providence could terminate its employment under clause 8.9.4 of the JCT Design and Build Contract (2016 edition), where its right to give a further notice referred to in clause 8.9.3 had never previously accrued.
What did the Supreme Court decide?
- Clause 8.9.3 essentially acts as a “gateway” to clause 8.9.4. The words make clear that the contractor must have had an accrued right to terminate under clause 8.9.3 before 8.9.4 applies.
- If an employer made two late payments, each being one day late, and a contractor was allowed to serve a termination notice on that basis, this would create an extreme outcome.
- There is no reason why the right to terminate should be symmetrical as between an employer and contractor given that the relevant contractual obligations are worded differently.
What can we learn from this?
This case may affect parties using both the JCT Design and Build Contract 2016 and 2024 editions, which retain this specific wording. Parties will therefore need to carefully consider their positions under these standard form contracts when contemplating termination for default.
Need more clarity on termination matters? Don’t hesitate to get in touch. Our team is on hand to offer clear and commercial legal support.
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This article contains information of general interest about current legal issues, but does not provide legal advice. It is prepared for the general information of our clients and other interested parties. This article should not be relied upon in any specific situation without appropriate legal advice. If you require legal advice on any of the issues raised in this article, please contact one of our specialist construction lawyers.
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