Building a construction contract via WhatsApp?
For many of us, informal communication via WhatsApp forms part of our everyday communication. However, the recent case of Jaevee Homes Limited (Jaevee) v Mr Steve Fincham (trading as Fincham Demolition) (Mr Fincham) [2025] EWHC 942 (TCC) highlights that any messages concerning the instruction of works or services could be considered a construction contract and may have wider contractual implications than initially anticipated by the parties.
Jaevee instructed Mr Fincham to carry out demolition works at a former nightclub in Norwich. Mr Fincham argued that a binding contract was formed through an exchange of WhatsApp messages and emails in May 2023. In those messages the parties agreed a price of £248,000 for the works and discussed payment terms. Jaevee claimed that a formal sub-contract, issued by them on 26 May 2023, in fact governed the agreement (despite the fact that this sub-contract remained unacknowledged by Mr Fincham).
Following the commencement of the demolition works, Mr Fincham proceeded to issue four invoices for payment, dated 9 June, 23 June, 14 July and 27 July. Jaevee took issue with Mr Fincham issuing invoices at such frequency on the basis that monthly payments had been agreed. Despite Jaevee paying a proportion of the sums invoiced by Mr Fincham, the parties fell into a dispute regarding the work executed and the sums due.
After serving a statutory demand, Mr Fincham initiated adjudication proceedings, claiming that the invoices were valid payment notices and that Jaevee had not issued any pay less notices. The Adjudicator agreed with Mr Fincham and decided that Jaevee Homes Limited must pay the sum of £145,896.31 (together with additional sums in respect of interest and the adjudicator's fees). Jaevee then sought a declaration from the High Court challenging the Adjudicator's Decision.
Key Findings
Contract Formation via Informal Communications
The court held that a binding contract was formed through the exchange of WhatsApp messages and emails between April 2023 and 17 May 2023 (opposed to being formed through the subsequent formal sub-contract issued by Jaevee a few days later). Despite the informal nature of these communications, they at least evidenced agreement on essential terms: scope of work, price, and payment mechanism. The court emphasised that agreement on the duration of works or a precise start date is not essential for contract formation in a construction context, implied terms of reasonableness will assist. Equally, where payment terms have not been precisely agreed, the Housing Grants, Construction and Regeneration Act 1996 "is to fill the gap".
Validity of payment applications
The Court examined whether the four invoices issued by Mr Fincham constituted valid payment applications under the Housing Grants, Construction and Regeneration Act 1996. It concluded that all four of the invoices were acceptable applications for payment. However, the Court ruled that Mr Fincham was only entitled to issue one payment application a month, therefore only three of the four invoices were valid.
Practical Implications
- Informal communications can create binding contracts - this case emphasises that contracts can be formed through informal means, such as WhatsApp messages, provided they contain essential terms.
- Importance of clear payment terms - parties should ensure clarity in payment application procedures to avoid disputes. In the absence of detailed terms, statute will intervene.
Necessity of timely pay less notices - employers must issue pay less notices within the stipulated timeframes to dispute payment applications. Failure to do so may result in liability for the full claimed amounts.
Conclusion
The decision highlights the willingness of the Court to accept that informal communications can amount to contract formation and that it is critical for parties to maintain clear, documented agreements and to comply strictly with payment notice requirements to mitigate risks of disputes and enforcement actions.