The case of Jaevee Homes Ltd v Fincham (t/a Fincham Demolition) (2025) has recently considered whether informal discussions through messaging services such as WhatsApp and social media could constitute a binding contract. In this article, B P Collins’ dispute resolution team examines the case in more detail.
Background
Jaevee Homes Ltd (Jaevee) contacted Fincham to request that they demolish a building. Through WhatsApp messages, Fincham provided a quote for the works and Jaevee responded confirming that Fincham had the job, their start date, and how the works will be paid. Jaevee then provided Fincham with a purchase order and their own standard form of sub-contract.
Fincham sent Jaevee their invoices in accordance with what was agreed via WhatsApp, but Jaevee argued that they did not need to pay these invoices because the discussion within WhatsApp was informal and not a binding contract. Therefore, Jaevee only paid to Fincham what they believed they owed through their subcontract and Fincham brought the matter to an adjudicator. It was then found that the WhatsApp exchange constituted a binding contract and that Jaevee owed Fincham the remainder of their invoices.
How can WhatsApp messages form a binding contract?
There are generally six key components to a binding contract:
- an offer;
- an acceptance of the offer;
- consideration (usually a payment of some sort);
- an intention to create legal relations;
- capacity (usually means of legal age and sound mind); and
- legality (the contract’s purpose must be legal).
Offer
An offer requires one party to state clearly their proposal to the other, the proposal will be a promise to do something in exchange for another action that the second party does in return. For example, the offer by a hairdresser to cut your hair in exchange for your payment of £20. The offer will then provide the other party the opportunity to accept but may be withdrawn before it is accepted.
Acceptance
An acceptance requires the other party to agree to the proposed offer, which signifies their willingness to be bound. It is important to note that whilst usually acceptance is shown in writing, this is not a necessity; one can accept an offer by their conduct instead. For example, if following the hairdresser’s offer you did not orally say “yes” but sat in the chair and allowed them to start cutting your hair, this would likely constitute your acceptance of the offer.
Consideration
Consideration requires the provision of a benefit by both parties. This does not necessarily need to be money but may be goods or a promise. Using the above analogy, the consideration you have provided to the hairdresser is payment of £20.
Intention to create legal relations
The parties must understand that the contract is binding and could be enforced in a court of law. In a commercial context, this is usually presumed to be the case.
Capacity
The parties must have the legal capacity to enter into a contract. Usually, this means being of legal age and sound mind, and not subject to any disabilities or conditions that can materially affect what the parties believed they were agreeing or doing.
Legality
The purpose of the contract must not be illegal or violate public policy.
Does a contract need to be a formal written document signed by all parties?
In short, no.
In Jaevee v Fincham it was found that the WhatsApp discussions constituted a legally binding contract because it met the key requirements outlined above.
In summary, Fincham offered to provide Jaevee the demolition services in exchange for an agreed fee. Jaevee accepted the offer (confirming he had the job). The agreed consideration was the fee for Jaevee’s services. The parties had capacity to enter into the contract and the stated purpose of the contact (demolition services) was not illegal.
Jaevee argued that the WhatsApp messages did not constitute a contract because the messages were an informal discussion. However, and given the commercial context here, there was a presumption that the parties intended to be bound. Furthermore, that presumption is supported by what the parties proceeded to do: Jaevee provided the purchase order and form of sub-contract, and Fincham proceeded with the works, which were commenced on the basis of the WhatsApp messages.
A cautionary tale
It’s important to be aware that contracts do not need to be in writing, and as long as the key requirements of a contract are met, it is likely to be a legally binding agreement. Contracts can be formed by an oral conversation, WhatsApp exchanges, emails, text messages or even Facebook messages. The chances of there being a binding contract are even higher when it relates to business/commercial activity.
If you would like further information or advice on the preparation, interpretation or breach of contracts, please contact B P Collins’ dispute resolution lawyers on 01753 889995 or email enquiries@bpcollins.co.uk.
