Court Of Appeal Finds Binding Contract Concluded By Exchange Of Emails Despite Referring To Preparation Of Formal Agreement

The Court of Appeal held that an agreement concluded by emails against a backdrop of communications over WhatsApp was binding even where the parties had not agreed every term of the contract: DAZN Limited v Coupang Corp. [2025] EWCA Civ 1083.

The judgment is a further illustration of the English courts' pragmatic approach to contract formation in commercial negotiations. The court's focus is on whether the parties have agreed all terms they themselves regard as essential, and whether their words and conduct objectively demonstrate an intention to be bound. The whole course of negotiations must be considered, and a binding contract can be formed even if the parties anticipate a formal document to follow. The absence of "subject to contract" wording may be a factor though it is not decisive.

This case is also a timely reminder that informal communications, such as emails and WhatsApp messages, can crystallise a binding agreement - even if a number of elements of the contract are yet to be agreed. Where parties do not wish to be bound immediately, it is prudent to state expressly that the negotiations are subject to contract.

Background

The dispute arose from the sublicensing of broadcasting rights for the FIFA Club World Cup 2025 in South Korea. FIFA, the owner of the rights, licensed them globally to DAZN, which was then authorised to sublicense those rights in various territories. Coupang, a South Korean e-commerce and streaming provider, sought to acquire co-exclusive live and video-on-demand (VOD) rights for the tournament from DAZN.

Negotiations between DAZN and Coupang were conducted over several months, primarily via WhatsApp messages and calls between senior representatives. In February 2025, Coupang sent DAZN a proposal by email (the February email), offering USD 1.7 million for co-exclusive rights. DAZN responded by email in March (the March email), confirming acceptance of Coupang's offer and indicating that contract drafting would commence.

The dispute arose when DAZN subsequently took the position that no legally binding contract had come into effect.

The Commercial Court (HHJ Pelling KC) held that a contract had been concluded between the parties and Coupang was entitled to specific performance. He also granted injunctive relief to protect Coupang's ability to enjoy its broadcasting rights and restrain DAZN from acting in breach of the agreement.

DAZN appealed on the basis that:

1. the February email did not amount to a contractual offer by Coupang because it did not objectively demonstrate an immediate willingness to be legally bound upon acceptance;
2. the March email from DAZN was not an unqualified acceptance; and
3. there was no intention to create legal relations by the exchange of emails because any agreement was subject to contract and the parties anticipated a formal agreement would be drafted and signed.

DAZN also sought to challenge the terms of the injunctive relief granted, on the grounds that:

1. it was based on improper reasons, because the judge had wrongly inferred from DAZN's submissions that it intended to breach the agreement that had been found to exist; and
2. it went beyond enforcing the declared contractual terms by prohibiting DAZN from providing the broadcast feed to any party other than Coupang or DAZN's own platforms or services. This prevented DAZN from making the feed available for free on its YouTube channel.

Decision

The Court of Appeal (Popplewell LJ, Newey LJ and Arnold LJ) upheld the High Court's finding that a binding contract had been formed by the exchange of emails and rejected the appeal.

Binding contract

The legal principles to be applied in deciding whether parties had concluded a legally binding contract were set out in Smit Salvage BV v Luster Maritime SA (The Ever Given) [2024] EWCA Civ 260 [2024] 2 All E.R. (Comm) 504 | [2024]. In summary:

1. The whole course of the parties' negotiations must be considered.
2. A binding contract can be formed even if the parties expect a formal document to follow which may include further terms yet to be agreed.
3. Whether the parties intended to be bound is determined objectively from their words and conduct.
4. The burden lies on the party asserting that a contract has been concluded to establish that this is the case.
5. The absence of "subject to contract" wording is not decisive. All depends on context.

The court (Popplewell LJ giving the lead judgment on this issue) considered that the following aspects of these principles merited further observation:

1. The court must look at the whole of the negotiations between the parties both before and after the alleged contract. Focusing on isolated exchanges could be misleading.
2. Where parties anticipate a subsequent formal contract, the question of whether their agreement is subject to contract or binding will depend on whether all essential terms have been agreed or whether significant matters are left for later.
3. Business people conducting commercial negotiations often use imprecise, informal language. The court should interpret communications by reference to their substance and context, not by strict legal drafting standards.
4. If negotiations occur in a context where urgent performance is required, it is more likely the parties intend to be bound even if some details remain to be agreed.

The court carried out a detailed review of the various communications between the parties before and after the alleged contract. In particular, it noted that the February email from Coupang followed various messages between the parties about the making of an offer and summarised the deal terms. The email was also more formal than the preceding communications, which had been over WhatsApp. When considered in full, it was clearly intended as a contractual offer. The language used was not perfect idiomatic English, but the author's first language was not English. It was sufficient to convey a formal offer and was treated as such by both sides. It was more than a proposal for consideration by DAZN following which the parties would move on to the next stage of deciding whether to enter a contract.

DAZN's response in the March email was entirely unequivocal. DAZN had expressly stated that it accepted Coupang's offer and would proceed to contract drafting.

There was also nothing to suggest that the parties intended to defer legal effect until a formal contract was signed. On the contrary:

1. By the time of the exchange of emails, the parties had agreed all essential terms.
2. The use of the phrase "contractual phase" in the February email indicated an expectation that acceptance would give rise to a legally binding agreement.
3. The parties' subsequent conduct - including mutual congratulations, references to the deal being "finalised", and threats of legal action if DAZN reneged - reinforced the conclusion that a binding contract had been formed.
4. There was no urgency about the contract drafting process, and no attempt to negotiate further terms while the first draft was awaited.
5. The parties did not use "subject to contract" or equivalent wording, despite DAZN's familiarity with such language in other negotiations.
6. Although some of the evidence on this point was conflicting, it was common ground that parties operating in this industry contemplated being legally bound by terms to which they had agreed notwithstanding that a formal contract was still to be negotiated, drafted and signed.

DAZN's appeal against the High Court's finding that a contract had been concluded between the parties therefore failed on all grounds.

Injunctive relief

The court (Arnold LJ giving the lead judgment) held that the injunctive relief ordered by the High Court was not based on improper reasons, given that it was clear that DAZN wished to act in the manner restrained by the injunction if it was entitled to do so.

As to whether the prohibition on DAZN in providing the broadcast feed beyond its own platforms and services went further than what had been agreed by the parties, this depended on what they had meant by a term in the contract as to co-exclusivity. This was for the judge at first instance to decide in light of the admissible factual matrix. DAZN had failed to establish that the judge's interpretation of the co-exclusivity wording was wrong. He was therefore entitled to grant an injunction in the terms that he had.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.