Providence Building Services Limited v Hexagon Housing Association Limited: Supreme Court guidance on JCT contractor termination

The Supreme Court’s unanimous judgment in Providence Building Services Limited v Hexagon Housing Association Limited [2026] UKSC 1 settles a short but important question about a contractor’s right to termination for repeated employer defaults under the JCT Design & Build contract and offers broader guidance on interpreting ‘asymmetrical’ rights in standard form contracts.

The narrow question of law before the Supreme Court

The only issue before the Supreme Court was whether a contractor was entitled to terminate under clause 8.9.4 for a repeated ‘specified default’ where a right to give a further ‘termination notice’ under clause 8.9.3 had not accrued because the earlier specified default was cured within the cure period of 28 days.

Key contractual provisions

Clause 8.9.3 allows termination by the contractor via a termination notice if a specified default by the employer lasts longer than 28 days from receipt by the employer of a specified default notice from the contractor (served under clause 8.9.1).

Clause 8.9.4 then provides that if the contractor “for any reason does not give the further notice referred to in clause 8.9.3” (i.e. the termination notice) but the employer repeats the specified default, the contractor may terminate within 28 days after such repetition.

Background

Hexagon Housing Association Limited (Hexagon), the employer, contracted Providence Building Services Limited (Providence), the contractor, under an amended JCT Design & Build 2016 contract for the construction of apartment blocks in Purley.

Hexagon failed to make payment to Providence by 15 December 2022, and Providence served a notice of specified default pursuant to clause 8.9.1 the following day. The sum was eventually paid on 29 December 2022 (i.e. 14 days late), meaning the default did not continue the full 28 days and was cured. As the specified default did not continue for 28 days, no right to terminate by a further notice arose under clause 8.9.3.

Following receipt of another payment notice, Hexagon failed to make payment to Providence by 17 May 2023. On 18 May 2023, Providence served a termination notice under clause 8.9.4, treating the December non-payment by the final date for payment as the initial specified default and the default in May as the repetition. Hexagon paid the outstanding sum on 23 May 2023, disputed the termination as repudiatory and referred the dispute to an adjudicator, who largely sided with Hexagon.

The TCC also decided in favour of Hexagon; however, the Court of Appeal reversed that decision and, ultimately, Hexagon appealed to the Supreme Court.

The issues before the Supreme Court

As above, Hexagon argued that before a termination notice could be validly served by Providence for repetition of a specified default under clause 8.9.4, Providence must previously have had an accrued right to serve a termination notice under clause 8.9.3.

In contrast, Providence argued that where there had been a repetition of a specified default in respect of which a specified default notice had already been served, there was no requirement for the right to terminate to have previously accrued under clause 8.9.3.

Supreme Court’s ruling

Unanimously, the Supreme Court held that under clauses 8.9.3 and 8.9.4, the right to terminate under clause 8.9.3 must have accrued before the right under clause 8.9.4 could be used to terminate for a repeated default.

The Supreme Court held that clause 8.9.4 is “parasitic” on clause 8.9.3, rather than being separate from it, meaning a contractor may not terminate for repetition unless a right to terminate under 8.9.3 had previously accrued. The words: “If the Contractor for any reason does not give the further notice referred to in clause 8.9.3” would be otiose if clause 8.9.4 operated independently and that meant that the right to terminate must have accrued under clause 8.9.3 in order to allow the contractor to terminate under clause 8.9.4. It is only if the employer has failed to cure any earlier specified default within 28 days that the contractor can terminate for a repetition; for example, the contractor may not have decided to terminate where payment was made late by the employer, albeit after the 28 days allowed for cure.

The Supreme Court rejected the contractor’s interpretation, which would, in its view, produce an extreme outcome whereby, for example, two marginally late payments could justify termination. It followed that Hexagon’s appeal was allowed.

Termination right symmetry

The Supreme Court ultimately rejected the Court of Appeal’s attempt to force symmetry between the termination rights of the employer and contractor. The asymmetry is deliberate: JCT allocates different rights and obligations, and divergent wording should be given effect without reading contractor and employer termination provisions as if they mirrored one another.

Interpreting standard forms and asymmetrical clauses

Reaffirming the objective, contextual approach, the Supreme Court focused on the natural meaning of the disputed wording when read in the context of the contract as a whole. Crucially, it cautioned against using interpretation to erode asymmetrical bargains; different words in different provisions reflect deliberate allocation of risk and remedy and should not be forced into symmetry. Ultimately, the contractor may rely on other remedies in the event of non-payment, including the right to suspend works, commence an adjudication or claim interest on the overdue sum.

Why this matters

It provides welcome clarity on how contractors’ termination clauses operate in the standard form JCT Design & Build Contract in both the 2016 and the updated 2024 editions, which are widely used.