When does a Pre-Construction Services Agreement Really End?

Pre-Construction Services Agreements (“PCSAs”) have become a staple of the construction industry's approach to complex projects. They can be a valuable tool for both parties in the period before construction works begin – but as seen in a recent case, whether or not the main contract draws a clean line under the pre-construction phase will depend on the drafting of the PCSA. Clients should consider PCSAs in the round, including how to preserve their rights in relation to prior breaches of the PCSA, as well as how that might interact with end of liability provisions and caps on liability.

Belong v Seddon

The decision in Belong (Construction) Limited v Seddon Construction Limited [2026] EWHC 1275 (TCC) illustrates the uncertainty that can arise over which rights and liabilities existing under a PCSA will survive entering into the main contract.

Belong and Seddon had entered into a PCSA which included proposed contract documents, including an amended JCT Standard Building Contract 2016. 

The PCSA required Seddon to carry out an appraisal and surveys, and to inspect partially completed works that had been carried out by a previous contractor, to satisfy itself of all constraints for the project.

The PCSA also provided that: 

1. the parties’ “obligations” would last until the earlier of execution of the JCT contract, or termination of the PCSA (clause 2.1); 
2. until execution of the JCT contract, the parties’ “rights and obligations” would be governed by the PCSA terms supplemented by the proposed contract documents (clause 2.2); and 
3. upon execution of the JCT contract, the parties’ “rights and liabilities” would be “subsumed into and be subject to” the main contract (clause 2.3).

The parties entered into the JCT contract some months later. The JCT contract stated that Seddon would not be entitled to time and/or cost relief where there had been any error, omission, negligence or default by Seddon. However, the JCT contract did not include the obligation to carry out the opening up and testing works that had been included in the PCSA. 

Completion of the works was delayed due to Seddon carrying out air sealing works following an instruction from the Contract Administrator. Seddon sought an extension of time which was rejected by the Contract Administrator on the basis that the need to carry out the air sealing works during the course of the main contract works (rather than being identified and scheduled at the outset) was due to Seddon’s failure to open up and test in breach of the PCSA obligations. 

Seddon denied it was in breach because (i) the open up and testing obligation did not appear in the final JCT contract, and (ii) the PCSA provided that the parties' respective rights and liabilities were subsumed into and subject to the JCT contract. An adjudicator agreed with Seddon. Belong sought declarations from the court, including that the determination of the Contract Administrator (that Seddon was not entitled to any extension of time in respect of the air sealing works) had been correct.

Distinguishing between obligations and liabilities

The court agreed with Belong’s interpretation that liability for failure to carry out the opening up and testing works did not fall away at the point the JCT contract was entered into. The court held that the differing use of “obligations” and “liabilities” in clauses 2.1 to 2.3 was deliberate. The ongoing primary obligations ended, but the pre-existing liabilities were not extinguished when the PCSA was subsumed into the main contract.

The judge noted that the limitation clause in the PCSA – which provided that Belong could not commence legal action against Seddon under the PCSA after 12 years from the date of practical completion of all of the works under the JCT contract – would have been redundant if Seddon’s liabilities under the PCSA ended when the JCT contract was signed.

The court also decided that the Contract Administrator had been correct to treat the breach of the PCSA as falling within the provisions of the JCT contract (which disentitled Seddon to relief where it had been in breach, negligent etc) given the connection between the PCSA and JCT contract. 

Be clear over where you are drawing the line

The Belong v Seddon dispute illustrates that there are many considerations to factor in when operating under a PCSA arrangement and highlights the importance of clarity over which PCSA obligations (if any) the parties intend to become part of the main contract. The position will always depend upon the precise contract drafting, and the client and the contractor may have competing views on where the line is drawn. 

Under a PCSA, the contractor might seek a low cap on its liability as it is performing a service for a relatively low fee, or it might seek to ensure that its PCSA liability is extinguished when the main contract is entered into. From the client’s perspective, it will want to ensure that prior breaches of the PCSA are preserved. The client will also want to ensure that the limitation periods and caps on liability agreed under the main contract are applicable to breaches of the PCSA. 

On a practical level, it is also important to establish whether any obligations remain to be performed at the end of the PCSA period – this might extend to management services or procurement of subcontract packages that are yet to be procured at the time the contract is signed. The parties should also ensure that the contract documentation (including the technical documents) accurately reflects what activities are required from the contractor.