UK Construction and Law

A 200 page framework agreement left no gap for a duty of good faith, and the relational contract argument failed at the summary stage

By Staff Writer  |  27 August 2026

A fibre network contractor said its framework agreements and its exit deal were relational contracts carrying implied duties of good faith. The Technology and Construction Court has given summary judgment against it on every one of those claims, and has refused permission to plead the new particulars of breach that went with them.

Svella Connect Limited builds fibre optic network for Virgin Media Limited under three framework agreements originally made with NMCN plc: the Lightning Framework Agreement of 7 May 2019 and two Morpheus Framework Agreements of 14 February 2020, one covering the North West and one Yorkshire and the East Midlands. NMCN went into administration in October 2021 and the agreements were novated to Svella. Relations soured through 2024, an Exit and Settlement Agreement was signed on 24 July 2024, and litigation followed.

Virgin Media applied on 9 December 2025 for summary judgment or a strike out of claims in fraudulent misrepresentation, intimidation, causing loss by unlawful means, breach of implied terms of good faith, and disgorgement. When Svella served its evidence on 12 March 2026 it abandoned everything except the good faith case and withdrew a Reply running to 187 pages. That left one question for the hearing on 19 and 20 May: whether the good faith case had a real prospect of success.

A detailed bargain leaves nothing to imply

Each framework agreement ran to over 200 pages and was based on NEC standard terms. Clause 10.2 already required the parties to act in a spirit of mutual trust and co-operation. Recital 3 said no guarantee was given that the contractor would be appointed to carry out any works. Annexure 4 said the award decision was the client's alone and could not be contested. Clause Z22.1 said the arrangement was neither a partnership nor a joint venture. The initial term was three years, extendable at the client's election twice by twelve months, and either party could terminate for convenience on at least twelve months' notice.

Mr Justice Pepperall held that the question fell to be answered as at the date of the novations, that the evidence needed to answer it was already before him, and that the court should decide it rather than send it to trial. These agreements were the terms on which Svella pre-qualified to compete for work, with no promise of any work at all, and there was no gap for an implied term to fill.

He then ran the nine characteristics of a relational contract as a sense check rather than as statutory requirements. A three year term extendable to five, one-sidedly, is not especially long term. There was no exclusivity. There was no required investment, because the money spent buying the assets out of administration bought a business rather than answering anything the framework agreements demanded. The agreements were not relational contracts, and proof that a contract is relational does not in any event generate duties of good faith as a matter of law.

The settlement agreement fared worse

On the Exit and Settlement Agreement the judge went further. It is inherently unlikely, he held, that duties of good faith should be implied into a carefully negotiated settlement intended to end a troubled relationship. Where the parties had expressly agreed to use reasonable endeavours to find replacement volume if a build was rejected, an implied term was not necessary and would rewrite the bargain. That mattered: only around 26,000 of the 96,372 installations in Schedule 2 remained planned after the client scaled back in November 2024.

There was, in my judgment, no gap in that detailed contractual scheme that required to be filled by some obligation that Virgin Media should act in good faith.

Mr Justice Pepperall, sitting in the Technology and Construction Court

The refused particulars of breach are as instructive as the ruling on the implied terms. Allegations that money was not paid, or that committed volume was not granted, added nothing: if the sums were due they are recoverable in contract, and if they were not due there is nothing sharp about declining to pay them. Allegations that the client intended to take a course, drawn from a covertly recorded call of 3 October 2024, pleaded no completed cause of action because they never alleged the course was taken and sought no relief. Complaints about performance improvement plans and suspension ran into a scheme that already regulated auditing, service levels, the reasonableness of issuing a plan and the right to step in.

The reading for anyone working a call-off framework is that the more the parties wrote down, the less room is left to argue about the spirit of the thing. Where a framework guarantees no work, permits competitive bidding, allows termination at will and sets out its own performance machinery, a claim that the client behaved badly has to be pleaded against those express terms.