Delay and termination: When Does Delay Become Repudiatory – Lessons from Durkan v Wallace
The Technology and Construction Court (“TCC”) has recently handed down judgment in Durkan Estates Ltd v Wallace Estates Ltd [2026] EWHC 2003 (TCC), refusing a summary judgment in repudiatory breach dispute concerning remediation agreement. This decision provides a useful reminder of the high threshold for establishing repudiatory breach where delay is alleged, particularly where time is not of the essence and the dispute turns on complex factual issues.
Background
The dispute arose from a Remediation Agreement entered into under the Building Safety Act 2022. Durkan, the original developer of a residential building, agreed to undertake remediation works at its own cost following the making of a Remediation Order by the First-tier Tribunal.
The Agreement required practical completion by 19 September 2025, although it also contemplated that the completion date could be amended in accordance with the contractual provisions.
The works required Building Safety Regulator (“BSR”) Gateway 2 approval before construction could commence. Delays occurred during the design and approval stages and the works had not commenced when Wallace purported to terminate the Agreement in June 2025.
Wallace alleged that Durkan had committed repudiatory and anticipatory repudiatory breaches of contract, relying principally upon its failure to progress the works and achieve completion by the contractual Completion Date. Durkan denied those allegations and maintained that the termination itself was unlawful. Wallace applied for reverse summary judgment, arguing that Durkan had no realistic prospect of succeeding at trial.
The Decision
Mr Justice Constable dismissed Wallace’s application.
The Court concluded that Durkan’s claim had a real prospect of success and that the issues raised were unsuitable for summary determination because they depended upon numerous disputed questions of fact, expert evidence and contractual interpretation.
Key Findings
Repudiatory breach is highly fact-sensitive
The Court reiterated that determining whether a breach is repudiatory requires an assessment of whether the innocent party has been deprived of substantially the whole benefit of the contract. That assessment cannot ordinarily be made simply by reference to delay alone. The Court must consider all of the surrounding circumstances, including:
- the reasons for the delay;
- whether the delay was remediable;
- whether the defaulting party continued to perform its obligations;
- the extent of any benefit already obtained under the contract; and
- whether damages would provide an adequate remedy.
Delay does not automatically justify termination
Importantly, the parties accepted that time was not of the essence. Accordingly, missing contractual dates did not automatically entitle Wallace to terminate. Where time is not of the essence, delay will only justify termination if it is sufficiently serious to amount to a fundamental breach that deprives the innocent party of substantially the whole benefit of the contract. The Court emphasised that this is a high threshold.
Contractual termination provisions remain relevant
Although Wallace relied upon common law repudiation, the Court held that the contractual termination regime remained relevant. The Agreement distinguished between remediable and irremediable breaches and required notice together with an opportunity to remedy certain defaults before termination. mThe Court observed that contractual machinery of this nature may inform the assessment of whether conduct objectively amounts to repudiatory breach.
Time at large and estoppel required trial
Durkan argued that the parties had, through their conduct and ongoing discussions, effectively abandoned the original Completion Date and instead proceeded on the basis that completion would occur after Gateway 2 approval.
The Court considered that there was a realistic prospect that Durkan could establish either:
- a contractual agreement varying the Completion Date; or
- an estoppel by convention preventing Wallace from relying upon the original date.
These issues required factual investigation and could not be determined summarily.
Affirmation also required factual investigation
Durkan further argued that Wallace had affirmed the Agreement shortly before terminating it by continuing to work collaboratively, seeking an extension to the Remediation Order, and representing before the First-tier Tribunal that continuing with Durkan remained the preferred course. The Court held that this argument also had a realistic prospect of success and required determination at trial.
Practical Implications
This decision serves as a useful reminder that allegations of repudiatory breach in construction projects are rarely straightforward.
In particular:
- Delay alone will not ordinarily amount to repudiatory breach where time is not of the essence.
- Courts will carefully examine the parties’ conduct throughout the project before determining whether termination was justified.
- Contractual notice and cure provisions remain highly relevant, even where termination is said to arise at common law.
- Parties should exercise considerable caution before terminating for alleged delay where there are ongoing discussions, agreed revisions to programmes or disputed responsibility for delay.
- Applications for summary judgment are unlikely to succeed where the dispute depends upon contested factual evidence concerning delay, causation, waiver, affirmation or estoppel.
Lessons learned
The judgment demonstrates the TCC’s reluctance to determine complex repudiatory breach disputes without a full trial. Construction projects frequently involve evolving programmes, shared responsibility for delay and ongoing collaboration between the parties. In those circumstances, establishing a right to terminate at common law will often require detailed factual examination rather than summary determination.
Employers considering termination for delay should therefore ensure that both the contractual termination provisions and the common law principles governing repudiatory breach are carefully considered before bringing the contract to an end.
How CCC Can Help
Disputes concerning delay, termination and repudiatory breach are among the most complex issues in construction law. A party that wrongly terminates a contract may itself be found to have committed a repudiatory breach, exposing it to significant financial consequences.
At Contract & Construction Consultants (CCC), we advise employers, contractors, subcontractors and consultants throughout the lifecycle of construction projects. Our team has extensive experience assessing entitlement to terminate, analysing delay and contractual obligations, preparing extension of time and loss and expense claims, and supporting parties through adjudication procedures.
Whether you are considering terminating a contract, responding to allegations of repudiatory breach, or seeking strategic advice on a developing dispute, our specialists can provide clear, commercially focused guidance to help protect your position and minimise risk.
