The persistence of pre-construction liabilities: insights from Belong v Seddon

The Technology and Construction Court (TCC) decision in Belong (Construction) Limited v Seddon Construction Limited [2026] EWHC 1275 serves as an important reminder of the potential persistence of pre-construction liabilities in an industry where signing the main building contract is often expected to draw a clean line in the sand.

The judgment confirms that liability for breaches of obligations under a pre-construction services agreement can survive the execution of the main contract, even where those obligations were never carried across into it. Such lingering liabilities may re-surface during the main works phase and have significant commercial consequences for time and money claims.  

Background

Belong (Construction) Limited (Belong) engaged Seddon Construction Limited (Seddon) under a Pre-Construction Services Agreement dated 27 May 2020 (the PCSA) following the insolvency of the original contractor on a care home development project. 

Among Seddon’s obligations was a requirement to visit the property and carry out an appraisal and survey and inspection to satisfy itself of all constraints. The PCSA incorporated the then draft main contract (referred to as the “Proposed Contract Documents” (the PCDs)) containing an obligation to inspect, appraise, and open up / test existing air-sealing works (the ASW) on the partially completed site, and included a mechanism for potential appointment to the main works. The parties later executed an amended JCT Standard Building Contract (with Quantities) 2016 Edition on 18 December 2020 (the Main Contract). Notably, the Main Contract did not replicate the open-up and testing obligation that had been included in the PCDs appended to the PCSA. 

During the main contract works, the Contract Administrator instructed Seddon to undertake the ASW. In complying with this instruction, Seddon incurred delay and sought an extension of time. The Contract Administrator refused, attributing the need for the ASW (and the resulting delay) to Seddon’s earlier breach of its PCSA obligations in respect of surveying and opening up.

Seddon referred the matter to adjudication and succeeded. The adjudicator essentially viewed the Main Contract as superseding and discharging differing obligations under the PCSA. Belong challenged this via Part 8 proceedings, seeking a declaration to affirm the Contract Administrator’s original determination.

The TCC’s analysis

1) Primary and secondary obligations

At the heart of the case was clause 2 of the PCSA, and particularly the subsuming provision in clause 2.3:

“On the execution and completion of the Contract, the parties’ respective rights and liabilities in respect of all matters with which this agreement is concerned … shall be subsumed into and be subject to the [Main] Contract.”

In his judgment, HHJ Stephen Davies noted the linguistic distinctions within clause 2 of the PCSA. Clauses 2.1 and 2.2 referred to “obligations” that would continue in force (and remain governed by the PCSA and PCDs) until execution of the Main Contract. By contrast, clause 2.3 addressed “liabilities”, which would be “subsumed into and be subject to” the Main Contract on execution. Having been drafted by Belong’s lawyers, the Judge considered it reasonable to conclude that the different terminology used in the PCSA was deliberate. 

HHJ Stephen Davies then drew on the established distinction between primary obligations (i.e. original duties to perform, such as the “obligation” to carry out the opening-up and testing during the PCSA period) and secondary obligations (such as liabilities that arise on breach of a primary obligation). In his view, once the Main Contract was executed, the primary obligations under the PCSA came to an end. However, any breach of those primary obligations that had already occurred may have given rise to secondary obligations. Those secondary obligations were not swept away by the Main Contract, and instead constituted the “rights and liabilities” that were expressly subsumed into, and made subject to, the Main Contract in accordance with clause 2.3. 

The phrase “subsumed into” was given its ordinary meaning — the subsumed element does not necessarily lose its independent character simply by becoming part of a larger whole. Accordingly, while the PCSA largely fell away after Main Contract execution, it did not cease to exist for the purposes of enforcing accrued rights and liabilities. Seddon’s liabilities became “subject to” the Main Contract terms (for example, in relation to enforcement, limitation, and procedural matters) but were not extinguished. 

This interpretation was reinforced by the PCSA’s long-stop limitation provision, which was tied to practical completion under the Main Contract (rather than completion of the PCSA services). This provision would have been largely redundant if the PCSA liabilities vanished entirely on entering into the Main Contract. 

2) Impact on time and money claims

Having established that Seddon’s secondary liabilities under the PCSA survived, the court then considered their impact on Seddon’s entitlement to an extension of time under the Main Contract. 

The adjudicator had decided that references to Seddon’s own “error, omission, negligence or default” invalidating time and money entitlements in the Main Contract applied only to Seddon’s obligations under the Main Contract itself, and not to obligations under the PCSA. The adjudicator took the view that express words would be needed to extend those carve-outs to matters arising under the earlier agreement. 

HHJ Stephen Davies rejected this narrow interpretation. He noted that the clauses in question did not use limiting language such as “breach of the terms of this Contract”. Instead, they referred more generally to errors, omissions, negligence or defaults. On the facts, those words were wide enough to include non-compliance with obligations owed to Belong under the closely connected PCSA, provided the conduct could properly be described as falling within one of those categories. 

This broader reading aligned with the integrated nature of the contractual arrangements. As a result, Seddon had not been entitled to an extension of time for complying with an instruction to undertake the ASW. The adjudicator had therefore erred in its decision, and the Contract Administrator’s refusal of Seddon’s request for an extension of time was upheld.

Conclusion

This decision underscores the importance of precise language when transitioning from a pre-construction services agreement to a main contract to ensure (or avoid) the preservation of existing liabilities. Parties frequently use pre-construction service agreements to enable early involvement, surveys, design and risk identification while the main contract terms are being finalised. This case demonstrates that liabilities accrued during the pre-construction phase can persist after entry into a main contract. 

Courts are likely to enforce accrued liabilities unless the parties have used clear, express words to draw a line. Parties should therefore carefully consider whether they intend prior breaches and liabilities to be fully discharged, or preserved , and adopt clear, tailored on the “subsuming” provisions under a PCSA to ensure that the main contract draws the line where the parties intend it to. 

Another important aspect of this decision is its implication for negligence / breach carve-outs that are commonly used to limit a contractor’s entitlement to time and / or money entitlements. This judgment holds that (subject to the facts) such provisions can, without additional limiting words, capture breaches arising under a related contract – not just the contract in which the carve-out appears. Parties should therefore review and, where necessary, expressly address the interaction between these carve-outs and any pre-construction liabilities to ensure the intended allocation of risk is achieved.