"Can a contract be formed over WhatsApp?" This is the question that the High Court had to decide upon in the recent case of Jaevee Homes Ltd -v- Mr Steve Fincham.
In the digital age, the line between informal communication and formal agreements has blurred. This was touched upon in our previous article regarding the increased use of emoji’s.
The most recent example is the case of Jaevee Homes Ltd v Mr Steve Fincham, where the court answered whether a contract could be formed through a WhatsApp message exchange.
Case Overview: Jaevee Homes Ltd v Mr Steve Fincham
In this case, Mr Fincham (a builder), was engaged by Jaevee Homes Ltd (property developer) for a construction project.
Mr Fincham provided a quotation to Jaevee by email on 11 May 2023 but following this the parties had communicated via WhatsApp regarding project details and payments, including agreeing £248,000 for the works. On 26 May 2023, Jaevee issued an email containing a sub-contract and a purchase order for £248,000.
The contract dispute arose over the terms of the agreement, particularly concerning the scope of work and payment. Mr Fincham argued that the contract was agreed via WhatsApp on 17 May 2023. Jaevee argued that the contract comprised of the documents sent to Mr Fincham afterwards by email which had a payment schedule and specific payment provisions.
Initially, the case went to adjudication. The adjudicator decided in Mr Fincham’s favour. Despite this, Jaevee still failed to pay Mr Fincham.
Jaevee went on to issue a claim at court for declaratory relief against the adjudicator’s decision. The key question for the court to answer was whether the WhatsApp messages communications constituted a valid contract.
The court ruled that the WhatsApp messages exchanged between the parties constituted a legally binding contract. It was determined that the messages included clear offers and acceptances, demonstrating mutual consent and intention to be legally bound (the key elements of a legally binding contract). As such, they were not merely pre-contractual discussions.
This decision stresses that informal communication platforms, like WhatsApp, can be used to form enforceable contracts, provided the essential elements of contract formation are present.
What are the key elements of a legally binding contract?
For a contract to be legally binding, certain elements must be present:
- Offer: One party proposes terms to another.
- Acceptance: The other party agrees to the terms.
- Consideration: Something of value is exchanged between the parties.
- Intention to create legal relations: Both parties intend to enter into a legally binding agreement.
In the Jaevee -v- Fincham case, the court found that these elements were satisfied through the WhatsApp communications.
What are the risks with using WhatsApp for contractual arrangements?
While WhatsApp can facilitate contract formation, there are risks:
- Lack of formality: Messages may lack the formality of traditional contracts, leading to ambiguities.
- Misinterpretation: Informal language or emojis can lead to misunderstandings about the terms.
- Evidential challenges: Retrieving and presenting message histories in court can be complex.
Can a WhatsApp message be considered a valid contract?
Yes, if it contains a clear offer, acceptance, consideration, and an intention to create legal relations. This is evidenced by the decision made in Jaevee -v- Fincham.
Should I use formal language in WhatsApp agreements?
Yes, to avoid ambiguities and ensure clarity in the terms. The terms of the contract need to be clear and unambiguous.
Is it necessary to sign a contract for it to be valid?
Not always. In many cases, especially in informal agreements, a signature is not required. However, for significant transactions, a written and signed contract is recommended.
How can I prove a WhatsApp agreement in court?
By preserving the message history and ensuring it is accessible and authentic.
Can emojis in messages affect the validity of a contract?
Yes, if they cause ambiguity regarding the terms of the agreement.
The takeaway point is, while WhatsApp can be used to form binding contracts, it's essential to approach such agreements with caution and clarity. Ensuring that all elements of a contract are present and unambiguous can help in avoiding disputes and ensuring enforceability.
This information is for guidance purposes only and does not constitute legal advice. We recommend you seek legal advice before acting on any information given.
