From WhatsApp Chat to Binding Contract: Using social media in business

This article was written for and published as original content in the Business Time in Essex Magazine. 

Many businesses now use WhatsApp or social media messaging platforms to reach their customers and discuss their services. Whilst this is no doubt efficient, the recent High Court case of Jaevee Homes Limited v Fincham Demolition serves as a warning to those who conduct their business through informal social media sites as they may be committing themselves to more than they realise.

In this particular case, the parties sent each other WhatsApp messages setting out the demolition work required, start dates and how the work would be invoiced. Mr Fincham, carried out the work and submitted his invoices to Jaevee Homes. Jaevee Homes refused to pay, saying that a valid contract had not been entered into and so, after a few twists and turns and Mr Fincham attempting to liquidate the Company, the High Court had to decide whether the messages exchanged between the parties created a validly binding contract.

Can a WhatsApp message be a legally binding contract?

Upon reviewing the conversation, the judge held that messages such as, “are we saying it’s my job mate so I can start getting organised mate” (message from Mr Fincham) and “yes” (response from Jaevee Homes), were sufficient to be characterised as offer and acceptance and as such a valid contract was formed via these WhatsApp messages.

There were no specific terms about the duration of the works and payment terms other than a reference to arranging payments on a monthly basis but the court was still of the opinion that the key tenets of a contract, being offer, acceptance and consideration, were all present in the exchanges between the parties and everything else could be implied by common law or statute.

There are other cases where emails and even the use of a thumbs up emoji were enough to establish a contract but this recent case is a helpful reminder that even very informal language on platforms such as WhatsApp - and by extension others such as Facebook messenger - can bind you into a contractual relationship without you realising it.

It should therefore give pause for thought as to the appropriateness of using these platforms for business use as a few messages between a business and potential customer can be enough to create binding obligations, which may not be intended. There are also implications around the incorporation of other terms and conditions - either at common law or statute such as the Sale of Goods Act - which may not have been deliberated fully by the parties at the time.

What should I do?

If you are contracting with another party as part of your business or looking to secure services from a provider as a customer you should consider the following:

• Best practice is to have a clear written contract between parties, setting out exactly what each party is agreeing to, including obligations, payment terms and time scales.
• Until this is in place, your correspondence and discussions around terms, whether on WhatsApp or email or any other form of communication, should be marked “Subject to Contract”, as this makes it clear these discussions do not form part of the agreement until such times as there is an actual contract.
• Ensure your terms are clear, particularly around what you and the other party is obliged to do and what the payment and other important terms are.
• Consider including an “entire agreement” clause to make it clear that only the terms in the actual signed contract apply to the relationship between parties and not any other discussions or email conversations etc which may have occurred before.

In a world that is becoming increasingly digital and so communication, while accessible and plentiful, is becoming more and more reductive (for example the use of emojis or abbreviations such as “np” or “dw”), it appears the courts are prepared to overlook informality and the absence of clear terms for every single aspect of a contract and rule that a contract exists.

This judgment reminds us that a brief WhatsApp message can now hold the same weight as a carefully crafted legal contract and so parties need to be much more aware of their communications in a business setting and ensure the expectations of the parties are clearly agreed.

For commercially driven legal advice to support your business needs, please contact the specialist Corporate and Commercial team at Thompson Smith and Puxon by calling 01206 574431 or by emailing enquiries@tsplegal.com.