Unexpected contracts: The risk of digital deals in the construction industry

As communication through instant messaging platforms becomes increasingly popular, and second nature in our day-to-day lives, those operating in the construction industry should be mindful that even emojis and one-word messages can constitute a legally binding agreement. Where construction contractual terms are found to be lacking, the Housing Grants, Construction and Regeneration Act 1996 (commonly referred to as Construction Act) can imply contractual terms and conditions resulting in enforceable contractual obligations.

The recent decision in Jaevee Homes Ltd v Steve Fincham (t/a Fincham Demolition) (2025) highlights how the courts approach the evolving nature of contract formation in the digital age.

What happened?

At the centre of the dispute between the developer (Jaevee) and contractor (Fincham) was whether informal messages exchanged via WhatsApp constituted a valid contract. The messages, exchanged between a Jaevee representative and Steve Fincham, were in relation to the demolition of a nightclub.

Mr Fincham provided quotes for four separate stages of the works (totalling £248,000) and ultimately Jaevee's employee confirmed that Fincham had secured the contract for the works. The only agreed terms were the start date of the works and a requirement that Fincham would issue payment requests on a monthly basis. Jaevee sent a formal subcontract over a week later incorporating further terms and conditions but this agreement was never signed.

Jaevee did not pay the Fincham's invoices in accordance with the terms of the WhatsApp conversation. Crucially, Jaevee also did not issue any pay less notices, as required by the Construction Act, to withhold payment upon receipt of an invoice. Fincham therefore referred the matter to adjudication.

What were the parties' arguments?

Fincham's argument was simple: the contract had been formed on WhatsApp. Where the contract was silent as to key terms, the Construction Act implied statutory terms. Thus, Jaevee had breached the contract by failing to pay the invoices issued by Fincham within the agreed 30 days.

Jaevee's argument was twofold. Firstly, it suggested that no valid contract had been formed on WhatsApp. Core contractual terms were still to be agreed, and they alleged that the unsigned subcontract superseded any agreement over text message. Secondly, they alleged that the invoices did not comply with the Construction Act requirements, and subsequently, no sums could be owed for invalid payment notices.

What did the Adjudicator think?

Having considered that core contractual principles had been engaged (offer, acceptance and an intention to create legal relations), the adjudicator found that a simple contract had been formed through the text exchange. Consequently, the adjudicator found in favour of Fincham.

Jaevee challenged the adjudicator's decision and referred the matter to the Technology and Construction Court (TCC).

The TCC's views on casual contracting

The Court upheld the adjudicator's decision on the basis that key commercial terms had been negotiated and agreed, resulting in the formulation of a simple contract. As such, the Court concluded that Jaevee was liable for 3 of the 4 outstanding invoices, leading to an award of £125,650 plus interest in favour of Fincham. The fourth invoice (totalling £38,750) was discounted. This was because the parties had agreed to monthly invoicing, implying that Fincham was only permitted to submit one notice per month, and the discounted invoice was the second payment notice issued within a one-month period.

The Court's findings reaffirm that it is the substance of the contract, and not its form, that matters. The decision in this case serves as an important reminder of how modern communication tools can play a central role in contract formation. It is now clear that a construction contract can be validly established using instant messaging platforms.

Practical steps for the construction industry

What may appear to be 'informal' messages can in fact lead to formal consequences. Businesses should take care to limit potential contracting and litigation risks by ensuring that all agreements, written or oral, are well documented. In particular, construction professionals should consider limiting their risks by:

• Having appropriate internal policies and procedures in place around placing contracts and orders
• Prefacing that correspondence with "subject to contract" where appropriate
• Carefully following payment provisions required under relevant contracts or under the Construction Act, as may apply, being particularly careful if seeking to withhold payment
• Providing training to all employees so they understand the risk of contracting by instant message, and
• Completing a written agreement soon after an informal agreement is made, noting that any other agreement, whether written or oral, is superseded.

Looking ahead, with technology increasingly at our fingertips, the construction industry needs to be aware of the risks of how modern communication tools are used in business. It is likely we will see more cases around such exchanges forming part of contractual relationships and disputes involving messaging platforms, as the boundaries between casual conversation and formal agreement become increasingly blurred.