Built on a Text: How a WhatsApp Message Became a Legally Binding Building Contract

Firstly, What Makes a Contract… a Contract?

To form a valid contract under English law, five key elements must be present:

1. Offer – one party proposes terms
2. Acceptance – the other party agrees to those terms
3. Consideration – something of value is exchanged (typically money for services or goods)
4. Intention to create legal relations – both parties intend the agreement to be legally binding
5. Certainty of terms – the essential terms (such as price, scope, and payment) are clear and agreed.

When it comes to building contracts, additional elements such as the scope of work, payment mechanisms, timelines, and dispute resolution are often meticulously outlined in formal documents. Or so one would hope.

From Demolition to Determination: The WhatsApp Contract

In the Jaevee Homes case, a contractor and an employer agreed that some demolition work would be done. However, they didn’t see eye to eye on whether there was a proper and enforceable contract in place or, if there was, on what terms.

The contractor argued that there was a binding contract and the contract comprised of what was set out in WhatsApp exchanges. The court agreed and rejected the employer’s argument that a valid contract wasn’t created by the messages because there was no formal document setting out an express start date, duration, or detailed payment terms. The court found that the WhatsApp messages set out price, scope, and payment terms clearly enough to form a contract. It didn’t matter that there was no signed document or formal contract. The texts showed agreement on key terms - and that was deemed sufficient.

After four invoices went unpaid, the matter ended up in adjudication, enforcement proceedings regarding that adjudication and finally in the High Court.

The contract was for a lump sum but the court held that the contractor was entitled to payment of its monthly applications for payment (but not more than one a month, in this case). The Construction Act (the colloquial name for the Housing Grants, Construction and Regeneration Act 1996 as amended by the Local Democracy, Economic Development and Construction Act 2009) entitles a contractor to stage payments where work is expected to last longer than 45 days.

Key Legal Takeaways from the Case

1. Subject to Contract

The parties to this case found themselves in one adjudication and two court cases – all because it was unclear whether there was a contract and, if there was, what the terms of it were.

It is prudent to head your correspondence about proposed contract terms “Subject to Contract”. That might not always prevent a binding contract (on perhaps uncertain terms) from coming into existence before it is properly formalised, but often it will.

2. Starting work

Once work has commenced, it may be so much harder to argue that some sort of binding contract is not in place.

Sometimes, people use “letters of intent” to get work underway before a full contract is entered into - but they too can lead to all sorts of problems.

It is better to get a formal written contract in place before work begins.

3. Missing Terms? The Law Might Fill the Gaps

The absence of terms such as an express start or end date, or detailed payment clauses didn’t invalidate the contract. The Construction Act 1996 provides fallback provisions for payment mechanisms in construction contracts. The lack of a start date was not significant since work had in fact already started and indeed finished. Regarding the duration of the contract, the law would have implied a “reasonable time” in any case.

4. Invoices as Payment Applications

The contractor was entitled to issue monthly invoices, and because the employer didn’t respond with payment or pay less notices in time, the invoices became default payment notices under the Construction Act, entitling the contract to enforce them through adjudication and then summary judgment in the courts.

A Word of Warning for the Digital Age

This case serves as a wake-up call for anyone involved in construction or commercial projects, or frankly, any business deal. Casual chats and text threads may feel informal, but legally, they can have serious consequences.

Remember to mark all of your pre-contract correspondence “subject to contract” and don’t let work start on site until formal contracts have been agreed and formally signed or executed.

Otherwise, if your messages clearly outline who will do what, for how much, and when, you might have just formed a legally binding contract but with few or none of the protections and detail that a professionally produced contract should have.

If you're not careful, your friendly emoji-laden chat could be Exhibit A in a legal dispute.

If you have any questions about the content of this article, please do contact Sibel Vurdu on 020 8461 6179.