Construction contracts and WhatsApp- Contract created despite lack of formality.

Jaevee Homes Limited v Mr Steve Fincham (Trading as Fincham Demolition)[2025] EWHC 942, provided a clear reminder to the construction industry that contracts can be created from a series of informal communications.

Jaevee Homes Limited, a property developer, originally approached Fincham Demolition in 2023 to carry out the demolition of “The Old Mercy” nightclub in Norwich. A series of informal emails were exchanged between the parties, detailing the scope of the work, together with a cost estimate. There then followed a series of informal WhatsApp text messages and in those messages, the work was offered to, and accepted by, Fincham Demolition

Just before works commenced on site, Jaevee Homes sent Fincham a subcontract document and purchase order by email. These documents were not acknowledged or signed by Fincham.

After works had commenced, a dispute arose between the parties in respect of the validity and payment of various invoices raised by Fincham. Fincham referred the dispute to adjudication. At adjudication, Jaevee Homes argued that the contract governing the demolition works and payment for works was the sub-contract document sent to Fincham by email, just prior to works commencing. Fincham Demolition disagreed and argued that the contract was formed by the WhatsApp messages between the parties.

The Adjudicator agreed that the WhatsApp messages were the contract between the parties and the Adjudicator further held that certain outstanding invoices issued by Fincham Demolition were due to be paid as a result of the text messages between the parties constituting an agreement for Fincham’s invoices to be paid by Jaevee Homes within 28 to 30 days.

Disputing the Adjudicators decision, Jaevee Homes applied to the High Court for determination. The Judge however agreed with the Adjudicator’s earlier decision and also found that the WhatsApp messages, whilst informal, constituted a basic, but nonetheless concluded contract between the parties. From the email and WhatsApp messages exchanged, the Judge was satisfied that the parties had intended that the works should be started as soon as possible; agreement had been reached on when Fincham would attend on site; the scope of the works had been agreed; the price of the works had been agreed and there was no express indication that the parties understood that the final terms of the contract depended on further agreement – for example, the incorporation of Jaevee’s standard terms of business.

The Judge further determined that payment terms had been agreed. The WhatsApp message was understood to mean that Fincham Demolition were entitled to issue monthly applications for payment and in respect of which, would be paid, at latest, 30 days after delivery of their invoice. There was a separate issue as to whether Fincham Demolition were entitled to deliver more than one invoice in any one monthly period as they claimed. On this issue, the Court considered the Scheme for Construction Contracts as provided for by the Housing Grants, Construction and Regeneration Act 1996 (as amended) and accepted Jaevee Homes’ argument, that Fincham were free to make one, but only one, application for payment each month (the provisions of the statutory scheme stepping in where the contract was on this point deficient). There was however no agreement as to when in the month the application could be submitted.

Jaevee Homes v Fincham, illustrates just how easy it is for a contract to be formed, irrespective of formality. The Court will, where appropriate, look to impose the Scheme for construction contracts as provided by statute, to remedy a deficiency or non-compliance in a contraction contract. To avoid the traps, there are a few easy tips to follow.

• Make sure communication channels are carefully considered and consistent.
• Keep communications relating to the negotiation of contracts away from social media platforms or text messaging Apps. Where possible, use a work email where a degree of formality can be maintained.
• Make sure communications are clearly signposted as ‘subject to contract’ whilst the terms of any contract are being negotiated.
• Where possible, include in a formalised contract, an ‘entire agreement’ clause to capture the entire understanding between the parties.

Remember that contracts can be formed orally, so treat early telephone conversations and meetings with equal caution.