Selected cases

UK Supreme Court · [2026] UKSC 1

Providence Building Services Ltd v Hexagon Housing Association Ltd

The UK Supreme Court held that a contractor could not terminate under a JCT clause after a second late payment because the contract's...

UK Supreme Court15 Jan 2026

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Quick read

  • A termination clause is a sequence, not a general fairness test.
  • The UK Supreme Court held that a contractor could not terminate under a JCT clause after a second late payment because the contract's required earlier termination right...

Use this to check

  • Map the whole termination sequence before sending a notice
  • Check whether an earlier right actually accrued
  • Do not treat repeated breach wording as a standalone exit right

Decision snapshot

  1. What happened

    • Providence carried out construction work for Hexagon under an amended JCT Design and Build Contract 2016.
    • Hexagon paid one amount 14 days late.
    • Providence issued notices but did not obtain an accrued right to terminate under clause 8.9.
    • When a later payment was also late, Providence tried to terminate under clause 8.9.

  2. What the court had to decide

    • Did clause 8.9.
    • 4 create a fresh right to terminate for a repeated default, or did it require an earlier right to terminate to have accrued under clause 8.9.

  3. What the court decided

    • The Supreme Court unanimously allowed Hexagon's appeal.
    • On the wording of the standard-form provisions, clause 8.9.
    • 4 depended on a prior right to terminate having arisen under clause 8.9.

Practical impact

Practical read

  • A termination clause is a sequence, not a general fairness test.
  • Before ending a contract, trace every notice, deadline, cure period and precondition in order.
  • A serious commercial complaint does not replace the wording needed to create the right.

Useful next steps

  • Map the whole termination sequence before sending a notice
  • Check whether an earlier right actually accrued
  • Do not treat repeated breach wording as a standalone exit right
  • Keep service evidence and payment dates together
  • Name the clause: Identify the exact termination right and every linked definition or subclause.

The payment dispute

Hexagon made an initial payment 14 days late. Providence served the contractual notices but did not reach the point where clause 8.9.3 gave it an accrued right to terminate.

When another payment was late, Providence relied on the repeat-default wording in clause 8.9.4 and terminated. The dispute was about whether that later clause could operate without the earlier termination right ever having arisen.

Why the termination failed

The Supreme Court read the JCT provisions as a connected sequence. Clause 8.9.4 did not create an independent right to terminate whenever the same type of default happened again. It was available only where the clause 8.9.3 right had first accrued.

Providence therefore terminated without the contractual entitlement it relied on.

A practical contract-control method

  1. Name the clause

    Identify the exact termination right and every linked definition or subclause.

  2. Build the timeline

    Record each default, notice, service date, cure period and payment.

  3. Test each condition

    Mark each contractual precondition as met, unmet or uncertain.

  4. Check the proposed notice

    Make sure the notice uses the right clause, facts and service method.

What the decision does not mean

The Court did not say that repeated late payment is unimportant or that a contractor can never terminate after a repeat default. The result turned on this standard-form wording and the relationship between clauses 8.9.3 and 8.9.4.

Another contract may create a standalone repeat-default right, use different notice periods or treat persistent breach separately. Amendments to the JCT form can also change the result. That is why a party should work from the signed contract rather than a precedent notice, a project manager's memory or a summary of the unamended standard form.

Before a termination notice is sent

Key points

  • Read the executed contract, schedules and amendments together
  • Confirm the event falls within the clause being relied on
  • Check whether the first notice was validly served
  • Calculate cure periods using the contractual definition of day
  • Record payments, partial performance and any waiver discussion
  • Consider whether suspension, adjudication or another remedy is available
  • Have the final notice checked before service

Termination decisions are often made under cash-flow pressure. A short verification pause is still worthwhile because an invalid termination can hand the other party a much larger claim and stop the project before the underlying payment dispute is resolved.

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