Providence v Hexagon: Supreme Court Clarifies JCT Termination

Following on from our previous article: ‘Providence Building Services Limited v Hexagon Housing Association Limited’: What are the practical consequences for parties engaged in JCT Design & Build Contracts?

The Supreme Court's judgment in Providence Building Services Ltd v Hexagon Housing Association Ltd [2026] UKSC 1 marks a decisive clarification of the contractor's termination rights under clauses 8.9.3 and 8.9.4 of the JCT Design and Build Contract 2016. The dispute, widely followed in the construction sector, turned on a narrow but consequential question: does a contractor need first to have accrued a right to terminate under clause 8.9.3 before relying upon clause 8.9.4 to terminate for a repeated default?

The Facts

Providence (contractor) served a notice of specified default on Hexagon (employer) for a late payment in December 2022, this was remedied within the amended 28-day cure period. When Hexagon later made a second late payment in May 2023, Providence immediately sought to terminate under clause 8.9.4.

High Court and Court of Appeal Decisions

In the High Court Hexagon's position prevailed. The judge accepted that Providence could not terminate under clause 8.9.4 unless the earlier default had continued for the full cure period under clause 8.9.3. The Court of Appeal reversed that decision, finding that the contractor did not need to accrue the clause 8.9.3 right first; a repeated late payment following an earlier specified default notice was sufficient to trigger clause 8.9.4. The Court of Appeal's reading had created significant industry concern because it meant that even swiftly remedied late payments could later enable immediate contractor termination.

Supreme Court Judgment

The Supreme Court unanimously restored the High Court's approach. It held that clause 8.9.4 operates only when the contractor has already acquired, but not exercised, a clause 8.9.3 right to terminate. The Court grounded its reasoning in the natural and objective meaning of the contractual language and the logical sequencing of the clause structure. Clause 8.9.3 establishes the primary termination mechanism: a default must persist for the full 28-day period. Clause 8.9.4 is secondary and presupposes that the primary right has arisen first.

The Supreme Court considered the Court of Appeal erred because it detached clause 8.9.4 from the precondition embedded in the overall structure of clause 8.9. The Court emphasised that commercial contracts, especially standard forms like JCT, require internal coherence and predictability. Allowing clause 8.9.4 to operate without the clause 8.9.3 right having first accrued would disrupt that structure and generate commercial uncertainty.

Industry Significance

The judgment restores certainty for employers operating under JCT forms. Swiftly corrected late payments will not expose them to sudden termination under clause 8.9.4. At the same time, contractors retain other statutory payment remedies. This decision also reinforces orthodox principles of contractual construction: clauses must be read holistically and in a manner that preserves their internal logic.

How we can help

At Foot Anstey, our construction team regularly advises on JCT contracts and their practical application. If you would like to discuss the implications of this ruling, or require assistance with construction contracts or dispute resolution, please do get in touch with our team of expert construction lawyers or specialist property dispute lawyers.