Earlier this year the High Court confirmed that contracts created through informal communications, such as WhatsApp messages and emails, can still amount to enforceable construction contracts.
The case of Jaevee Homes Ltd v Fincham has changed the way that some construction businesses handle informal communications, as it underlines the need for those in the construction sector to approach negotiations with caution and to ensure agreements are properly formalised and managed.
At the centre of this case were discussions between Jaevee Homes and Fincham concerning demolition works at a Norwich nightclub site.
Their conversations by email and WhatsApp covered issues, such as scope of works, sequencing, timescales, price and payment.
Rather oddly, no signed, written contract was ever created, but Fincham began work and later issued invoices totalling just under £196,000.
This led to a disagreement over whether a binding contract had ever been formed and whether the invoices could be treated as valid payment applications.
What the court ruled
Having heard the evidence from each party, the court decided that the emails and WhatsApp messages together provided sufficient certainty to create a contract.
Where the parties had not expressly agreed terms, the gaps were filled by statutory provisions under the Housing Grants, Construction and Regeneration Act 1996 and the Scheme for Construction Contracts.
The judgment said that Fincham had the right to submit monthly payment applications, with the Scheme stepping in to supply the missing detail on timing.
However, it did find that an invoice was invalid because two applications had been issued within a single monthly cycle.
The remaining invoices were clear enough to stand as valid applications and, as Jaevee had not served payment notices, they became default notices.
The practical implication of this case
The decision highlights that only a few elements are needed for a construction contract to be enforceable and that courts are willing to imply terms where details are missing.
This can leave parties with obligations that they may not have wished or accounted for, which is why you should consider the following in your future work:
- Label negotiations – Mark discussions “subject to contract” until a final written agreement is executed.
- Record agreements – Even with familiar contractors, ensure all terms are documented and signed.
- Maintain consistency – Treat informal exchanges carefully, as they may be relied on as binding.
- Follow the contract – Once agreed, stick closely to the mechanisms on payments and variations.
If you are concerned about your construction contracts or would like guidance or support to create a formal agreement, please get in touch with our team today.