Take Care When Terminating Your Construction Contract: A Cautionary Tale

The High Court recently handed down judgment in the case of Green Deal Marketing Southern Limited v Economy Energy Trading Limited [2019], a case which turned on whether the defendant energy suppliers, E was within in its rights to terminate its contract with the claimant marketing company, G.  E alleged that G had failed to meet contractual key performance indicators (KPIs), and had terminated the contract in the belief that this failure, without more, was valid grounds for termination in accordance with the terms of the contract.

While this judgment was made in the context of a partnering arrangement for the sale and supply of gas and electricity, the Court's findings will be applicable to and of interest to any commercial arrangements which include KPIs. The judgment is particularly relevant to construction in the context where multiple contracts may be let under a single framework agreement or other partnering arrangement or where the contractor's performance