Courts find that WhatsApps have contractual consequences

WhatsApp and other messaging tools have become ubiquitous in business communication, offering convenience, speed and reach in developing customer relationships. However, their informal nature can give rise to data management issues and runs the risk of accidentally creating legally binding obligations.

These tools are designed for quick and informal communication on a smartphone, and users may not give their full attention to messages they receive or the weight of the responses that they send.

This can have significant business consequences further down the line. They also create an entirely separate chain of communications from that of emails, and it may not be easy to combine the two sets of documentation.

Two recent cases, Jaevee Homes Limited v Steve Fincham (trading as Fincham Demolition) [2025] EWHC 942 (TCC) and Lloyds Developments Ltd v Accor Hotel Services UK Ltd [2024] EWHC 1238 (TCC) illustrate these risks and offer practical lessons for professionals in the construction industry.

This led up to a key WhatsApp conversation in which Ben James of Jaevee responded 'Yes' when asked by Fincham whether he had been given the job. Some elements of the payment arrangements were also discussed, in particular that there would be 'monthly' applications and that payments would be made 'every 28 or 30 days from invoice'.

A few days after this WhatsApp conversation, Jaevee emailed Fincham a set of contract documents that included a purchase order and formal contract terms. 

These terms contained detailed provisions requiring Fincham to submit payment applications on a fixed date each month. However, Fincham had never communicated any acceptance of the formal contract terms.

Once the works had commenced, Fincham issued four invoices to Jaevee over a two-month period totalling £195,857.50. Jaevee argued that this was in breach of the payment application process set out in the 'formal' contract terms in relation to payment, as had been emailed by Jaevee. 

Jaevee only paid a total of £80,000 against these invoices, and a dispute arose regarding the amount of work completed as well as the sum properly due to Fincham.

In later High Court proceedings to enforce the adjudication, the judge further set out that even though the WhatsApp messages were informal they contained the scope of works, price and payment terms, which were the minimum elements needed to validly conclude a contract. Crucially, the judge found that there was no indication that any further terms would need to be agreed.

The absence of agreement on the other details (including a specific start date, duration and detailed payment terms) did not preclude the formation of a valid contract, as the court believed that much of this information could be inferred or implied.

While the payment terms stated in the WhatsApp messages did not fully comply with the requirements of the Housing Grants, Construction and Regeneration Act 1996, the court determined that any gaps in these terms could be satisfactorily filled by the Scheme for Construction Contracts Regulations 1998.

Jaevee had also argued that the invoices could not be considered as payment notices under the act, but the court disagreed and stated that given the nature and scope of the works the invoices and the information they contained were sufficient as applications for payment. The court also pointed to the fact that the WhatsApp messages, as a validly concluded contract, had referred to payment following the provision of an 'invoice'.

The court was able to infer the relevant monthly periods based on the formation of the contract through WhatsApp. As a result, the court determined that three out of the four invoices submitted by Fincham were valid applications for payment and Fincham was entitled to be paid a total of £157,107.50, £77,107.50 more than he had already been paid by Jaevee.

Jaevee certainly never intended for the WhatsApp conversation to be the binding contract, but this intention was not relevant to the court's final determination. This case underscores the courts' willingness to recognise informal communication as binding contracts.

Even if some key details are missing, the court is willing to take a pragmatic approach to infer this information from either common law or statute. This can, however, lead to ambiguous or unintended obligations for the parties. 

In this case, since the duration of the works had not been agreed there was only an obligation on Jaevee to complete the works within a reasonable period.

Lloyds Developments Limited v Accor Hotel Services UK Limited is one of the later cases in a series of legal skirmishes going back to 2022 between the hotel owner Lloyds and the developer Accor for the construction and management of a 17 storey, 290-bed hotel in Glasgow. This specific case was related to a claim for further security for costs made by Accor due to Lloyds going into administration.

During the hearing, Lloyds disclosed a PDF of redacted WhatsApp messages between relevant persons that were considered by the court to be in a 'muddled or jumbled form'. 

As the court's reading of the messages was 'impossible or incomprehensible', it ordered that the unredacted messages were to be reviewed by an independent law firm at Lloyds' expense. This independent firm would then determine what could be disclosed from an unbiased viewpoint.

Lloyds was also instructed by the court to explain the creation of the 'jumbled' PDF, and how such a 'patently inadequate document came to be produced' and submitted. 

The implication of the criticism is that the courts will expect that, where meaningful business communications are being conducted via platforms such as WhatsApp, these should be subject to the same standards and scrutiny that would otherwise be expected for written communications, if they are to be relied upon. 

In this case, it was more difficult for redaction to be justified, on the basis of confidentiality, privilege or otherwise, than it might have been, had the information been contained in a different format.

The line between legitimate business and personal communications can easily become blurred or substantially overlap and intertwine. Where litigation may arise, any disclosure exercise could become a minefield that may risk the ire of the court, as it did in this case.

However, both Jaevee and Lloyds demonstrate that courts are prepared to treat such informal communication as binding, and subject them to the same scrutiny as any other formal business documents. For professionals in the built environment, this means adapting our communication practices to reflect this reality and ensure clarity, compliance and control.

There are a few key lessons if businesses are to harness the benefits of messaging platforms without exposing themselves to unintended legal risks.

• Treat your informal communication channels with the same rigour as you would any of your other business channels and look to use more formal methods for important business exchanges.
• Remember the principles of contract formation. If there is a clear and certain agreement reached to provide something in exchange for a price then, as long as the parties indicate an intention to be bound by this agreement, and have the requisite capacity, a binding contract can be formed, regardless of the setting in which it takes place.
• Ensure that your data management policies consider how to record, retain and manage data in messaging platforms.