Michael Kitson

Michael Kitson, a director at Lindsays, said contractors and developers negotiating contracts cannot afford to presume that the details of text messages and those sent via messaging apps are not legally-binding.

It follows the case of Jaevee Homes Ltd v Fincham Demolition Ltd in which a judge ruled that a contract had been concluded through a short exchange of messages on WhatsApp, despite the absence of a signed agreement or formal written terms.

Mr Kitson, who advises developers, contractors and funders involved in a range of building projects across Scotland, said: “This case reinforces that it’s not how you communicate, but what you say that matters.

“WhatsApp might feel informal, but the law won’t automatically see it that way.”

The recent court case arose from a demolition project in Norwich, where pricing talks initially took place over email before shifting to WhatsApp.

In a key exchange, the contractor messaged: “Are we saying it’s my job mate so I can start getting organised?”. The developer replied: “Yes. Monthly applications.”  The contractor took this as concluding the contract.

The developer saw it as ‘a staging point’ and issued its standard terms purchaser order a week or so later. The contractor didn’t respond to those terms and started demolition work a few days later. 

The developer later claimed no binding agreement had been concluded by the WhatsApp messages and that its standard terms formed the basis of the contract. This led to a dispute over payment and invoicing.

The court disagreed. It ruled that where key commercial terms such as scope of work and price are clearly agreed, the mode of communication is irrelevant if an objective observer would view the parties as intending to enter into a contract. A contract had been formed by the WhatsApp messages and legal obligations followed.

Mr Kitson expects the decision to prompt businesses to reconsider how they negotiate contracts, particularly when using informal platforms – and advised caution around starting work or issuing payments without confirming terms in writing.

He added: “Many businesses will rightly be concerned about the risk of unintentionally entering into a contract, especially when using informal channels such as WhatsApp. If there’s no intention to be legally bound, that must be made explicitly clear, for example by prominently marking communications ‘Subject to Contract’. 

“It’s also essential to issue your standard terms early in negotiations to help reduce protect your position. This case is a timely reminder for businesses to review how they communicate, whether staff need training on contractual risks, and remain cautious about actions - such as starting work, authorising it to begin or making payments - that could imply agreement to terms that haven’t been properly finalised or aren’t as desired.”