What does subsuming actually mean and what happens when a pre-construction services agreement is subsumed into a Main Contract?

Background

Have you ever thought about what we mean when we say that one agreement is subsumed into another? What happens when something is “subsumed”? Consumption is a much more familiar concept- we may consume an entire family sized bag of salt and vinegar crisps, the latest Netflix series or an evening of World Cup games. The meaning of subsume according to Merriam Webster is “to include or place within something larger or more comprehensive: encompass as a subordinate or component element”.

In Belong (Construction) Limited v Seddon Construction Limited [2026] EWHC 1275 (the “TCC”), the court held that liabilities arising from breaches of obligations under a pre-construction services agreement (the “PCSA”) survived the subsuming of the PCSA into a subsequent JCT Standard Building Contract (with Quantities) 2016 Edition, with schedule of amendments (the “JCT”).

The dispute related to delays to air sealing works being undertaken by Seddon, pursuant to an instruction given by the Contract Administrator, and whether an EOT was permitted for those works. Under the PCSA Seddon had an obligation to open up and test the works done previously by another contractor. Clause 2.3 of the PCSA provided that the parties' rights and liabilities would be subsumed into and subject to the JCT, whilst preserving liabilities for pre-existing breaches. The effect of entering into the JCT is that the parties’ primary obligations under the PCSA come to an end, with future performance governed solely by the JCT; however, liabilities arising from any prior breaches of those PCSA obligations survive.

The TCC confirmed that “subsuming” a PCSA into a later contract does not extinguish liabilities for earlier breaches but, rather, those liabilities survive and become subject to the terms of the works contract. The TCC, therefore, concluded that an adjudicator had been wrong to find the JCT contract superseded liabilities arising under the PCSA.

Rights, obligations and liabilities

The court made specific reference in the judgment to clause 2 in the PCSA noting the differences of the wording in each of the sub-clauses regarding “rights”, “obligations”, and “liabilities”. The court noted that, whilst it’s reasonably clear that each sub-clause deals with a different topic, the difference between the obligations and liabilities appears intentional because once the JCT has been entered into “(a) there are no continuing obligations under the PCSA or continuing rights or obligations under the PCSA in relation to the Works; whereas (b) there may be continuing rights and liabilities in respect of the subject matter of the PCSA, including work carried out under the PCSA, which are to be “subsumed into and be subject to the [JCT] contract."

Seddon argued that there was no difference between obligations and liabilities, which effectively meant the same thing. The court, whilst accepting that in some circumstances people may refer to an obligation and liability interchangeably, rejected this position reasoning that: “(a) there is an intrinsic difference in contract law between primary and secondary obligations; and (b) … it is conventional to equate being under a secondary obligation under a contract to being under a liability for breach of a primary obligation, whereas one would not usually equate being under a primary obligation to do something as being under a liability, even though it would not be a misuse of language to describe someone as being liable to perform a primary obligation.” Clause 2.3, therefore, preserves the parties’ ability to pursue claims for pre-contract breaches of the PCSA, notwithstanding that the PCSA had been subsumed.

What does “subsumed into and be subject to” mean?

The judgment raises a relatively interesting point about what is meant by the subsuming of rights and liabilities under a PCSA, notably the following wording: “shall be subsumed into and be subject to the Contract”. The judgment suggests that where a PCSA is “subsumed” into a main contract, liabilities arising from a contractor’s failure to perform obligations under the PCSA are not extinguished but also highlights that the concept and the mechanism of subsuming is unclear and would benefit from clarification in drafting.

As per para 46, “These words do not have the effect that liabilities for pre-existing breaches of obligations are brought to an end by the JCT Contract, or that they survive only insofar as they would also have been liabilities for breaches of obligations under the JCT Contract had the JCT Contract been in existence at the time of the alleged breach. The liabilities remain in existence as liabilities, but from the date of the JCT Contract they are included in the JCT Contract and made subject to it.”

This is helpful clarification of the interaction between a PCSA and subsequent works contract, which is a common scenario in construction across all sectors. By subsuming a PCSA into a subsequent works contract, an employer wouldn’t want to have lost any rights it may have against a contractor who hasn’t carried out its pre-construction services in accordance with the PCSA.

The case also demonstrates the practical risk that, during the transition from PCSA to a building contract, pre-existing PCSA obligations may be overlooked and not fully carried through into the works contract. Employers should therefore carefully review PCSA services and ensure that they are fully included in the works contract alongside a “subsuming” approach. It is also advisable to spell out clearly what the parties mean by subsuming so that there can be no argument over the implications down the line.

The concept of “subsuming” remains imprecise and risks creating gaps between pre-construction obligations and construction-phase risk allocation.