Belong v Seddon: Can PCSA liabilities survive following execution of a JCT contract?

Earlier this year, the Technology and Construction Court (TCC) handed down judgment in Belong (Construction) Ltd v Seddon Construction Ltd, confirming that liabilities under a pre-construction services agreement (PCSA) may survive the execution of a later contract unless that contract clearly replaces or extinguishes them.

Background: How the dispute arose  

The dispute arose from the construction of a care home. Belong had engaged Seddon under a PCSA. PCSAs are commonly used to govern early-stage activities before a building contract is entered into. They enable contractors to undertake preparatory work, such as design development, surveys, investigations and early procurement, to maintain programme momentum pending execution of the main contract. Under the PCSA, Seddon was required to carry out pre-construction investigations and assessments of the air-sealing works (partially completed works that were carried out by the previous contractor, who had become insolvent), before the parties entered a JCT building contract.

During the project, additional air-sealing works were instructed, causing delay. Seddon sought an extension of time under the JCT contract but Belong argued that the need for those works arose because Seddon had failed during the PCSA stage to properly inspect, open up and test the existing air-sealing. Belong therefore rejected the extension of time claim.

Seddon successfully challenged that decision in adjudication, arguing that the relevant inspection obligation existed only under the PCSA and did not form part of the subsequent and final JCT contract – the JCT did not require Seddon to undertake opening up and testing. Belong then commenced Part 8 proceedings in the TCC, raising the question of whether liabilities arising from breaches of the PCSA survived the execution of the subsequent JCT contract.

Key legal issues

The TCC was asked to analyse the relationship between the PCSA and the subsequent JCT contract. In particular, it considered:

• Whether liabilities arising from a breach of obligations under the PCSA survived execution of the main JCT contract;
• Whether there was a meaningful distinction between "obligations" and "liabilities" in clause 2 of the PCSA, or whether those terms should be treated as synonymous;
• The meaning of clause 2.3 of the PCSA, which provided that the parties' rights and liabilities under the PCSA would be "subsumed into and be subject to" the JCT contract upon its execution;
• Whether Seddon's alleged failure during the PCSA stage to inspect, open up and test the existing air-sealing works could still be relied upon after the parties entered into the JCT, despite that obligation not appearing in the JCT contract; and
• Whether a breach of the PCSA could amount to an "error, omission, negligence or default" for the purposes of the extension of time and loss and expense provisions contained in the JCT contract.

The TCC's decision

The TCC found in favour of Belong and overturned the adjudicator's interpretation of the contractual provisions. Central to the decision was clause 2 of the PCSA, which governed the transition from the pre-construction phase to the subsequent JCT contract. The TCC focused on the different language used in clauses 2.1, 2.2 and 2.3, concluding that each provision addressed a different aspect of the parties' relationship whilst transitioning to the main JCT contract, and was deliberately drafted, by solicitors, using different terminology.

Clause 2.1 of the PCSA provided that the parties' "obligations" under the PCSA would continue until either the execution of the JCT contract or termination of the PCSA. Clause 2.2 then provided that pending execution of the JCT, the parties' "rights and obligations" relating to the works were governed by the PCSA.

By contrast, clause 2.3 did not refer to "obligations". Instead, it provided that upon execution of the JCT contract, parties' "rights and liabilities" in respect of matters covered by the PCSA would be "subsumed into and be subject to" the JCT contract. The TCC held that this difference in wording was deliberate.

The judge rejected Seddon's argument that "obligations" and "liabilities" were interchangeable. Drawing on established contractual principles, the TCC distinguished between:

• Primary obligations: the contractual duties owed by a party under the PCSA; and
• Secondary obligations (liabilities): the consequences that arise when those primary obligations are breached.

The TCC held that clauses 2.1 and 2.2 brought the parties' ongoing PCSA obligations to an end once the JCT contract was executed. However, clause 2.3 was intended to deal with a different issue: what happened to liabilities that had already arisen from earlier breaches of those obligations. Those liabilities survived.

The judge considered that this interpretation was commercially sensible. Once the JCT contract was entered into, there would be no need for the parties to continue performing obligations under the PCSA because those obligations had been replaced by the JCT. However, claims arising from breaches committed during the PCSA period could still exist and required a contractual mechanism to preserve them, which clause 2.3 fulfilled.

The TCC also examined the meaning of the phrase "subsumed into and be subject to" the JCT. It rejected Seddon's contention that these words extinguished any liabilities arising under the PCSA. Instead, supplemented by the literal and ordinary meaning of 'subsumed' from a dictionary, the TCC held that liabilities for historic breaches remained intact but became governed or 'subsumed' by the contractual framework of the main JCT contract.  

Importantly, the TCC found that the omission of the "open up and testing" obligation from the final JCT contract did not retrospectively remove liability for any failure to comply with that obligation during the PCSA stage. If Seddon had breached the obligation while it was in force, Belong remained entitled to rely upon that breach even after the parties entered into the JCT contract.

The TCC further held that an earlier breach of the PCSA could constitute an "error, omission, negligence or default" for the purposes of the extension of time and loss and expense provisions contained in the main JCT contract. Under clause 2.28.6.5 of the JCT, the contractor is not entitled to an extension of time where the delaying event arises because of its own error, omission, negligence or default. Similarly, clause 4.20.3 prevents the recovery of loss and expense where such costs arise from the contractor's own failings. The TCC concluded that these provisions are drafted broadly and are not just limited to breaches of obligations contained within the main JCT contract. As a result, where a contractor's earlier breach of a PCSA has caused or contributed to the delay, that breach may be relied upon to defeat an extension of time or loss and expense claim under the main building contract.  

Accordingly, the TCC concluded that liabilities arising from breaches of the PCSA survived the execution of the JCT contract and could be relied upon when assessing Seddon's entitlement to an extension of time. Belong therefore succeeded in its challenge to the adjudicator's decision.

Conclusion  

PCSAs are generally used to manage the parties' obligations during the pre-construction phase. Once the main building contract is executed, those PCSA obligations will usually fall away, and the project will instead be governed by the terms of the building contract. However, as Belong v Seddon demonstrates, liabilities arising from breaches of the PCSA do not necessarily fall away at the same time. The decision is a reminder that conduct during the pre-construction phase can have lasting consequences.  

Unless the main building contract clearly provides otherwise, claims relating to breaches committed during the PCSA period may survive, even where the relevant obligation does not appear in the main building contract itself. Parties should therefore pay careful attention to understand their obligations under a PCSA and review any transition provisions when moving from a PCSA to a building contract. The execution of the main contract should not be assumed to draw a line under pre-construction liabilities. Unless the contract clearly provides otherwise, those liabilities may survive and continue to affect the parties' rights and remedies under the main contract, such as entitlement to extensions of time and additional payment during the construction phase.

More broadly, the judgment reinforces the notion that a PCSA is not merely a stepping stone to the building contract, but a standalone agreement with terms that may remain relevant long after the main building contract has been entered into.

If you have any questions about construction contracts, or the subjects discussed in this article, please contact Muhammad Karimabadi, Katherine Doran or your usual contact at TLT.

Authors: Muhammad Karimabadi and Katherine Doran

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2026.  For more information see our terms & conditions.