Can WhatsApp messages be a binding legal contract?

By David Brown, Partner, Construction, CooperBurnett LLP

WhatsApp messages can appear like quite a casual way of keeping in touch with customers and clients. It seems unlikely then that these messages could provide a binding legal contract further down the road but a recent court decision found that they can…

The court decided in the case of Jaevee v Fincham that an exchange of WhatsApp messages was evidence of and constituted a concluded contract.

One party had sent a formal subcontract document after the exchange, but that was too late, because the parties had already reached an agreement, and the subcontract document was not accepted by the defendant and did not become incorporated in the contract.

Although a construction case, this is of interest to anyone who enters into a contract in the days of informal WhatsApp messages and emails.

Mr Fincham, whose company is a demolition contractor, asked the representative of the developer if he ‘had the job’. The messages concluded with the developer asking the contractor if they could start on Monday.

He said he could and asked: “Are we saying it’s my job mate so I can start getting organised mate” and the developer confirmed by saying, “Yes” and then said, “monthly applications”.

The demolition contractor replied, “Are you saying every 28 or 30 days from invoice? That’s a yes, not on drawdowns then good”. The developer replied, “OK”.

The court found that the exchange of communications by email and WhatsApp messages ‘…whilst informal, evidenced and constituted a concluded contract’.

Although the developer argued that the duration, start date and payment terms were not agreed, the court said that these were not essential terms that would prevent a concluded construction contract.

The court found that the parties had agreed payment terms, in that they had agreed that the defendant could make only one application for payment each month and would be paid at least 30 days after delivery of that application or invoice, and the court was able to imply other relevant payment terms by the reference to the Scheme for Construction Contract.

In the construction context, very few elements need to be agreed to form a binding contract, as the remainder of the terms can be implied by common law and statute. This can lead to unintended obligations and liabilities for the parties.

It is suggested contracting parties adopt practices that include the following when starting a project:

• Make it clear, from the beginning, that you want to enter into a written contract and, if you have not negotiated and finalised one, make sure that a properly drafted letter of intent is signed before the works start and then move on quickly to finalise a contract.

• Send the contract to the other side as soon as possible and mark all correspondence ‘Subject to Contract’. Then make sure that the contract is signed by both parties.

• List the documents that form part of the contract.

• Make sure that the contract states that any amendments must be made in writing and must be signed by both parties, in order to avoid unintentional amendments through informal email or WhatsApp correspondence.

Headed up by Partner, David Brown, the Construction team at CooperBurnett LLP provides expert advice to businesses surrounding issues including contracts. The team has recently had a case whereby informal messaging led unfortunately to the termination of a contract. We suggest that businesses have a practice whereby members of staff are made aware of the risks of using informal communication channels. These include:

• informality of tone and content leading to ambiguity about the terms of the contract and the risk these terms are not fully documented;

• regulatory compliance - for example privacy laws and data protection; and

• exposure to litigation risk if messages are not retained on the company’s systems.

It is important to use communication platforms that ensure proper retention and accessibility of business records to comply with legal obligations and to support the position in any potential dispute. For example, there is an obligation of disclosure in litigation and an inability to do so could have adverse consequences.

The more junior members of a business may have grown up with messaging platforms and should be aware that such casual conversations could amount to contractual commitments if they meet the basic elements of a contract-offer, acceptance, consideration and intention to create legal relations.

David joined CooperBurnett LLP in March 2023 to launch and head up its Construction group. He is a member of The Technology and Construction Solicitors Association, the Society of Construction Law and the Kent Construction Focus Group.

With more than 30 years’ experience, David’s work typically involves providing dispute resolution and contract law advice to building contractors, developers, sub-contractors, architects, surveyors and construction professionals. He is an accredited mediator and has been a Professional Conduct Panel Member of RIBA for 14 years.

This blog is not intended as legal advice that can be relied upon and CooperBurnett LLP does not accept any responsibility for the accuracy of its contents.