Delay can put enormous commercial pressure on a construction project. But even significant delay does not automatically give a party the right to terminate.
The recent Technology and Construction Court decision in Durkan Estates Ltd v Wallace Estates Ltd [2026] EWHC 2003 (TCC) is a useful reminder of the risks involved. Although the case concerned a remediation agreement under the Building Safety Act rather than a standard construction contract, the principles considered by the Court have wider relevance where termination is being contemplated because works are seriously delayed.
What happened?
Durkan had agreed to undertake remediation works to a residential building owned by Wallace. The Agreement required practical completion by 19 September 2025, subject to adjustment under its terms.
The works required Building Safety Regulator Gateway 2 approval before construction could begin. Delays arose during the design and approval process and, by June 2025, the physical works had still not started.
Wallace terminated the Agreement, alleging that Durkan’s failure to progress the works amounted to repudiatory breach. Durkan denied that and argued that Wallace’s termination was itself unlawful.
Wallace sought summary judgment on the basis that Durkan had no realistic prospect of succeeding. The Court refused the application. It did not decide that Wallace’s termination was necessarily unlawful. Rather, it concluded that Durkan had a real prospect of succeeding and that the issues required fuller factual investigation at trial.
Delay does not automatically justify termination
The parties accepted that time was not of the essence. That was important. Missing the contractual completion date did not, by itself, entitle Wallace to terminate at common law.
For delay to amount to repudiatory breach, it must be sufficiently serious that the innocent party is deprived of substantially the whole benefit of the contract. That is a high threshold and is assessed in context, not simply by looking at how late the project has become.
The reasons for the delay may matter. So may the extent to which the defaulting party is continuing to perform, whether the position can be remedied and what the parties themselves have done while the delay has been developing.
The contract
Wallace relied on a common law right to terminate for repudiatory breach, but the Court nevertheless considered the contractual termination provisions relevant.
The Agreement distinguished between remediable and irremediable breaches and required notice and an opportunity to remedy certain defaults. The Court considered that provisions of this kind could inform the question of whether particular conduct was sufficiently serious to amount to repudiatory breach.
Where a construction contract contains a notice and cure procedure, parties should therefore be cautious about assuming that alleging repudiatory breach allows that machinery simply to be bypassed.
Your own conduct can also matter
Durkan also argued that Wallace had continued to work collaboratively with it despite the delay, including seeking an extension to the Remediation Order and indicating that continuing with Durkan remained the preferred option.
Durkan relied on that conduct in support of arguments concerning affirmation and estoppel. Again, the Court did not decide that those arguments would ultimately succeed. It decided that they had a realistic prospect of success and required investigation at trial.
The practical lesson is that termination rights need to be considered before positions are taken. If a party continues to treat the contract as being on foot, agrees revised arrangements or otherwise continues the relationship after becoming aware of a serious breach, that conduct may affect the termination arguments available later.
What should you consider before terminating for delay?
Before bringing a contract to an end because of delay, the position needs to be looked at as a whole. That should include:
- what the contract actually says about completion and termination;
- whether time is of the essence;
- who is responsible for the delay;
- whether the breach is capable of being remedied;
- whether any notice or cure procedure has been followed; and
- how both parties have behaved since the delay arose.
A project being significantly late may be commercially serious without necessarily amounting to repudiatory breach.
The key takeaway
Durkan v Wallace does not establish that delay can never justify termination. The contractual provisions, the reasons for the delay and the parties’ own conduct can all matter. In Durkan, those issues were sufficiently complex that the Court refused to determine them without a full trial.
For employers, contractors and subcontractors, the practical message is straightforward: termination for delay should be treated as a strategic contractual decision, not simply the next step once a project has become seriously late.
If the termination is not justified, the party serving the notice may itself be exposed to a claim for repudiatory breach and significant financial consequences.
How CCC can help
Contract & Construction Consultants (CCC) advises employers, contractors and subcontractors on delay, extension of time, loss and expense and termination issues.
We can review the contract and project history, assess the risks of the available options and advise on strategy before irreversible steps are taken. Where termination has already occurred, we can also assist in assessing whether it was contractually and legally justified and in preparing or defending the resulting claims.
