Textual Providence and the Gospel of JCT – Termination Clauses Interpreted: Providence Building Services v Hexagon Housing Association [2026] UKSC 1

Providence Building Services v Hexagon Housing Association [2026] UKSC 1 

Introduction 

In Providence Building Services Ltd v Hexagon Housing Association Ltd [2026] UKSC 1, the Supreme Court allowed an employer’s appeal as to the proper interpretation of the JCT Design and Build Contract 2016’s termination provisions. The immediate issue concerned a contractor’s right to terminate for repeated late payment: 

“Can the contractor terminate its employment under clause 8.9.4 of the JCT […] where a right to give the further notice referred to in clause 8.9.3 has never previously accrued?” 

The judgment is significant for construction lawyers, given JCT’s widespread use and the JCT 2024’s adoption of the same termination clause. Lord Burrows’ reasoning is also a pithy and authoritative restatement of various matters of wider commercial interest:  

1. The approach to interpretating industry-wide, standard form contracts;  
2. The limited role of previous versions of standard forms when doing so; and  
3. The continued prevalence – following Arnold v Britton [2015] UKSC 36 – of contractual language over commercial common sense. 

The Contractual Provisions in Summary 

Clause 8.9 [5]: Clause 8.9 of the JCT Design and Build Contract 2016 set out the Contractor’s rights to terminate for default by the Employer. In summary: clause 8.9.1 allows the Contractor to give a notice of specified default (including late payment); clause 8.9.3 allows the Contractor to serve a further termination notice if the Employer’s notified default continues for 28 days post-notice; and clause 8.9.4 permits termination for the repetition of a specified default where “for any reason” the Contractor has not already given the further termination notice under clause 8.9.3. 

Competing Interpretations [16-17]: The Employer argued that clause 8.9.4 could only be engaged if the Contractor had previously acquired (but not exercised) a right to terminate under clause 8.9.3 – meaning the earlier default must have gone uncured for at least 28 days [16]. The Contractor contended that no such accrued right was required: once a specified default had been notified, any later repetition entitled it to terminate immediately under clause 8.9.4 (which mirrored the Employer’s termination rights) [17]. 

Decisions Below: Adrian Williamson KC held for the Employer at first instance, concluding that clause 8.9.4 required a previously accrued right to terminate under clause 8.9.3. Arguments of harshness against the Contractor – based on cashflow concerns and business common sense – were of limited assistance [19-28]. Stuart-Smith LJ in the Court of Appeal disagreed: emphasising the background of the Employer’s own termination rights, the language of clause 8.9.4 did not require a previously accrued right to terminate under clause 8.9.3 [31-33]. Although commercial commonsense did not take the matter further generally, he found the availability of other remedies to contractor cashflow difficulty did not detract from the Contractor’s concerns [43]. The Supreme Court unanimously allowed the Employer’s appeal. 

Interpretation of Standard Form Contracts 

The Supreme Court reaffirmed that industry-wide standard forms, such as JCT contracts, are to be interpreted by reference to the orthodox objective approach. Lord Burrows rejected the suggestion that standard forms involve a fundamentally different interpretative exercise: 

“The established approach, based on the objective intentions of the contracting parties in the relevant context, should still be applied to the interpretation of an industry-wide standard form contract” [31] 

That said, he also accepted that the context against which objective intention is assessed differs in some important respects. First, explanatory notes are admissible guides to interpretation [24]. Second, past decisions of the Courts on the same or earlier terms are also admissible [26]. Third, where parties choose an industry-wide standard form, it is generally assumed that they intend their rights and obligations to be consistent with those of others using the same form [30]. As Lord Burrows put it: 

“Where parties choose to use an industry-wide standard form, it can generally be taken that their objective intentions […] are that their respective rights and obligations should be consistent with those of other parties using the same form and should reflect the objective intentions of those who were concerned with the drawing up of that standard form agreement.” [31] 

Courts are, accordingly, reluctant to adopt interpretations that would fragment the meaning of standard clauses depending on the idiosyncrasies of contracting parties. 

Previous Versions of Documents and the “Archaeology of the Forms” 

Lord Burrows also drew a careful distinction between legitimate contextual material and impermissible “archaeological digging” into earlier standard form editions. Citing  Beaufort Developments v Gilbert-Ash [1999] 1 AC 266, 274, he reiterated that: 

“The evolution of standard forms is often the result of interaction between the draftsmen and the courts and the efforts of the draftsman cannot be properly understood without reference to the meaning which the judges have given to the language used by his predecessors” [24] 

However, he cautioned against assuming that differences between successive editions of a standard form were consciously adopted by the parties to achieve a particular legal effect. Drawing on Moore-Bick LJ’s judgment in Seadrill Management Services Ltd v OAO Gazprom [2010] EWCA Civ 691, at [28], Lord Burrows discouraged “Archaeology of the forms”, save where “it is possible to identify with a degree of confidence the reason for a particular amendment to a standard form” [28]. Relying on former editions outside that category of case is an impermissible exercise “not wholly removed from that of referring to drafts produced during the course of negotiations” [28]. 

In Providence, the Supreme Court therefore concluded that neither previous editions of the JCT nor commentary on them assisted in resolving the issue [38], and that the contract had to be construed on its own terms, by reference to the language used [32-35]. 

The Limited Role of Commercial Common Sense 

The judgment strongly reaffirmed Arnold v Britton, while also referencing the “iterative approach” proposed in Wood v Capita [2017] UKSC 1173. The parties’ chosen words are of primary importance and when performing its iterative analysis, courts must not to allow commercial common sense to displace clear language: 

“The words used by the parties are of primary importance so that one must be careful to avoid placing too much weight on business common sense […] at the expense of the words used” [22]. 

The iterative approach underpinned the Court’s willingness to consider the rationality of the Employer’s contented interpretation [34-35], having already found it to be the text’s most natural reading [32-33]. Lord Burrows’s view was not displaced by the commercial impact of the Employer’s interpretation on contractor cashflow [20(iv), 38]. As Lord Burrows made clear, contractual words should not be distorted to promote one party’s commercial interests: perceived defects in industry wide-standard forms are matters for future drafting, not judicial correction [38]. 

 Practical Takeaways for Lawyers and Parties 

Start With the Words: Even in industry-standard contracts, close attention to the language is critical. Courts strongly resist interpretations which render express words “redundant”, or which are “inept” to convey the proposed meaning [32-33]. 

Standard Form Means Consistency: Where parties adopt industry-wide standard forms like the JCT, courts will consider consistency across the industry, by reference to the drafters’ intentions and their explanatory notes [24-31]. 

Archaeologists Beware: Previous editions and case law may assist where a change clearly responds to a known issue, but generalised comparisons between editions will not [24-28]. 

Commercial Common is Limited: The orthodoxy of Arnold v Britton remains well-entrenched: arguments of commercial inconvenience will not prevail over the natural meaning of the text. 

Article by Rob Hammond