Failing to proceed with due diligence: can this constitute a repudiatory breach of a building contract?

By Andrew Outram

The Technology and Construction Court examined this issue in Sabic UK Petrochemicals Ltd v Punj Lloyd Ltd and Vivergo Fuels Ltd v Redhall Engineering Solutions Ltd and found in each case that it was not a repudiatory breach on the facts of the case.

The cases involved a similar set of facts; namely a contractor was appointed under a contract to construct certain works on a project. In each case, but for different reasons, the contractor fell into substantial delay and the relevant employer invoked the contractual termination provisions of the contract to terminate it.

In both cases, the contractor challenged the contractual termination and the employer resisted the challenge on the basis that the contracts had been validly terminated or, if they had not, that the failure to proceed diligently constituted a repudiatory breach of contract…

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