Jurisdiction(s):
United Kingdom

UK Supreme Court: JCT Design and Build 2016 clause 8.9.4 requires accrued right; contractor cannot terminate for two late payments unless the first default continued beyond 28 days

Published on: 15 January 2026

Published by a LexisNexis Construction expert

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Article summary

Background

This appeal concerned the proper interpretation of a termination clause within a building contract. The parties adopted the Joint Contracts Tribunal (JCT) Design and Build Contract 2016, a standard-form agreement very widely used across the construction industry. The wording of the termination clause in dispute is unchanged in the 2024 edition of the JCT contract.

The contract was between Hexagon Housing Association Ltd (the Employer) and Providence Building Services Ltd (the Contractor). Under that agreement, the Contractor was to construct buildings in Purley, London, in accordance with the Employer’s specification. A timetable governing payments formed part of the bargain.

The dispute centred on two instances of late payment by the Employer. In December 2022, the Employer paid the Contractor 14 days after the date for payment. In May 2023, the Employer again failed to pay on time; on the following day, the Contractor issued a notice purporting to terminate the contract. The Contractor’s case was that the contract permitted termination upon two late payments by the Employer, provided that a specified default notice had been served in relation to the first late payment, which it had...

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