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January 16.2026

2 Minutes Read

Supreme Court Ruling on Late Payments: A Game-Changer for Construction Law

Design and Build Contract 2016 book cover; Construction Law Regulations & Principles.

Understanding the Supreme Court Ruling on Late Payments

In a landmark decision, the Supreme Court has sided with a late-paying client, Hexagon Housing Association, in a contentious legal dispute with Providence Building Services, a contractor that walked off a site due to frustrations over delayed payments. This ruling underscores a critical lesson for all parties in a construction contract: being the victim of a late payment does not automatically entitle a contractor to terminate the agreement.

Key Elements of the Dispute

The case revolved around a JCT (Joint Contracts Tribunal) Design and Build Contract, where Providence alleged that Hexagon's delay in payments warranted an immediate contract termination. After 21 instances of late payments, with notable occurrences in December 2022 and May 2023, Providence issued a termination notice. While Providence defended its actions by asserting the contract allowed termination after two late payments, Hexagon contended that the first overdue payment was settled within the contractually amended 28 days.

Legal Intricacies and Outcomes

The Technology and Construction Court initially ruled in favor of Hexagon, prompting Providence to appeal. The Supreme Court's final judgment on January 15, 2026, confirmed that termination rights are not solely based on late payments but must adhere to the contractual framework outlined in clause 8.9.4. The judges emphasized that permitting a contractor to terminate simply because late payments occurred—even just one day late—would be an extreme measure, and pointed out that serious delays should be more definitive in their consequences.

Implications for Construction Professionals

This ruling serves as a crucial reminder for contractors and clients alike within the construction industry. The clarity on how late payments are treated within contracts could help avoid similar disputes in the future. As construction professionals review their contracts, an understanding of these legal principles will be paramount in navigating contractual agreements effectively.

Advice on Navigating Construction Contractual Issues

In light of the decision, it may be beneficial for both contractors and clients to seek legal counsel to ensure that payment terms are clear and adequately safeguard their interests. Engaging a construction lawyer can aid in negotiating contracts and effectively managing disputes.

Building & Construction Law

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Supreme Court Ruling on Late Payments: A Game-Changer for Construction Law

Understanding the Supreme Court Ruling on Late Payments

Key Elements of the Dispute

Legal Intricacies and Outcomes

Implications for Construction Professionals

Advice on Navigating Construction Contractual Issues

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