In Jaevee Homes Limitedv Mr Steve Fincham, a court found that WhatsApp messages constituted a valid construction contract and that invoices were valid payment notices.
A court has recently confirmed an Adjudicator's Decision that WhatsApp messages constituted a construction contract, and invoices submitted with reference to them were therefore valid payment notices.
In Jaevee Homes Limited ("Jaevee")v Mr Steve Fincham (t/a Fincham Demolition) ("Fincham") [2025] EWHC 942 (TCC)deputy High Court judge Roger Ter Haar KC confirmed an adjudicator's decision that a construction contract had been formed by an exchange of WhatsApp messages, allowing the contractor (Fincham) to issue monthly applications for payment.
In this case, the parties agreed that Fincham would carry out certain demolition works to a former nightclub but there was a disagreement between the parties as to the terms of the agreement. Mr Fincham provided a quote to Jaevee by email on 11 May 2023, but, following the quote, messages to agree the price were exchanged via WhatsApp, including an offer of £248,000 for the works. On 26 May 2023 Jaevee issued an email containing a sub-contract and a purchase order. The total price of the demolition works was agreed at £248,000.
The claim arose out of an adjudication brought by Fincham. Fincham argued that the contract was agreed on the 17 May 2023 (via WhatsApp) with payment to be made 28 or 30 days following issue of an invoice. Jaevee argued that the contract comprised of the documents it sent to Fincham on 26 May 2023 and works commenced on 30 May 2023, which had a payment schedule, and specific payment provisions. Fincham claimed for payment of four invoices which it maintained were payable, as no payless notices had been served by Jaevee. The four invoices were issued on 9 June, 23 June, 14 July and 27 July 2023. Jaevee argued that the parties had agreed that payment applications should be submitted monthly, and in accordance with the conditions emailed on 26 May 2023.
The issue in the adjudication was whether the invoices were valid payment applications, and ought to have been paid by the final date for payment. On 11 September 2024, the Adjudicator decided that they were, and that Jaevee must pay the sum of the four invoices, interest, and the Adjudicator's fees.
Jaevee failed to pay the invoices in full. Fincham sought to enforce the Adjudicator's Decision, however Jaevee still refused to pay.
A Part 8 claim was raised by Jaevee for declaratory relief against the Adjudicator's Decision. Jaevee sought declarations that:
- Jaevee engaged Fincham to carry out demolition works pursuant to the terms of written sub-contract agreement in accordance with the standard terms of business of Jaevee; or, alternatively
- Jaevee engaged Fincham to carry out the demolition works subject to a basic contract formed by the exchange of written communications by email and WhatsApp text messages between April 2023 and in or around 23 May 2023 which included a requirement that Fincham issue applications for payment on a monthly basis.
The judge found that the WhatsApp messages concluded the contract, and, in his view, they could not be interpreted as pre-contract discussions. The WhatsApp messages demonstrated agreement on the essential elements of the contract, including the price, the scope of works, and payment terms (being 28-30 days from date of invoice). The judge found that the contract was formed on the 17 May 2023 and that the scheme for construction contracts applied.
Jaevee sought to argue that payment terms had not been agreed by 17 May 2023. In his analysis the judge found that "the absence of payment terms is not antithetical to the existence of a concluded contract- an important target of the [Construction Act 1996] is to fill the gap if a contract does not contain appropriate payment terms". Therefore, although the WhatsApp messages did not agree all aspects of payment (including payment notices and pay less notices), it did agree on a price, and a final date for payment. The contract was therefore capable of being concluded then.
The judge found that the subcontract documents issued on 26 May (i.e. after the contract was concluded) were therefore irrelevant, including the additional payment requirements.
Key takeaways
- This is a stark warning that informal communications still have the power to bind parties for significant sums of money.
- The timing of contract formation will be driven by the actions and communications of the parties.
- Employers should be particularly mindful at the outset of contract negotiation to demonstrate in all communications that agreements will be subject to contract.
A link to the full judgement can be found here.
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