In January 2026, the UK Supreme Court delivered a definitive judgment in Providence Building Services Limited v Hexagon Housing Association Limited, UKSC 1, settling a significant debate regarding the termination provisions of the JCT Design and Build Contract. The case addressed whether a contractor could terminate a multi-million-pound project due to an employer’s repeated late payment, even if the initial late payment had been rectified.
The contractor, Providence, sought to terminate its employment after Hexagon Housing Association paid an interim invoice late for the second time. Under the JCT contract, contractors can issue a "specified default" notice for late payment. If the employer pays within the cure period, the default is remedied. However, the contract also states that if the employer repeats the default, the contractor may terminate. Providence argued that the second instance of late payment was a "repeated default" that justified immediate termination, despite Hexagon having cured the first instance.
The Supreme Court unanimously ruled in favor of Hexagon, overturning the Court of Appeal. The Justices held that for the "repeated default" termination clause (Clause 8.9.4) to be triggered, the contractor must have had an accrued right to terminate for the original default (Clause 8.9.3). Because Hexagon had paid the first invoice within the 28-day cure period, the initial default effectively "evaporated" for the purposes of termination. Therefore, the second late payment had to be treated as a fresh default requiring its own notice and cure period, rather than a trigger for instant termination. This judgment provides essential clarity to the UK construction sector, ensuring that termination—a "nuclear option"—cannot be deployed for minor or rectified administrative slips, thus stabilizing contractual relationships.
Source: HSF Kramer