Contract Law UK: Your Informal Communications Could Be Legally Binding
Are you aware your casual WhatsApp messages and emails might create legally binding agreements? Did you know that UK contract law allows informal communications to establish enforceable contracts.
In fact, the Court of Appeal showed this in a notable case. A binding contract emerged from email exchanges, WhatsApp messages, and phone calls between DAZN (a global sports broadcaster) and Coupang (a South Korean streaming platform). The case involved broadcasting rights for the FIFA Club World Cup 2025.
English law’s contract requirements are simple: offer, acceptance, and intention to create legal obligations. Understanding these simple aspects of UK contract law is vital for business operations. The Court determined that the parties’ informal exchanges contained all these elements. We’ve written this article to help you ensure you protect yourself from accidental agreements and to direct you through UK’s contract formation landscape.
How Informal Communications Can Form a Contract Under UK Law
UK law recognises contracts that come together through many different channels, not just formal paperwork. It’s therefore important to understand how UK contract law works in relation to your daily communications.
Verbal and written exchanges: What counts as a contract?
Many people don’t realise that verbal agreements are legally binding in the UK. A valid contract needs four vital elements: one party makes an offer, another accepts it, something valuable changes hands (consideration), and both sides want to create legal relations. Courts look at these elements objectively rather than focusing on how people communicated.
Verbal contracts are legally binding but proving what people agreed to can be tricky. Courts need supporting evidence like witness statements, follow-up emails, payment records, or meeting notes. Smart business practice suggests documenting any verbal agreement’s terms in writing through a quick email or letter.
The role of emails, WhatsApp, and phone calls
Digital communications now create binding contracts all the time. Courts have made it clear that emails can be legally enforceable agreements when they have all the contract elements. Text messages and WhatsApp chats are a great way to get legal commitments too.
The High Court’s decision in Jaevee Homes Ltd v Fincham showed that WhatsApp messages “evidenced and constituted a concluded contract”. Phone calls can seal deals too – just ask businesses that got legally bound through broker cold calls.
Electronic signatures work just as well as handwritten ones in many cases. This rule applies to simple email signatures and even first names in chat apps.
Why ‘subject to contract’ matters
“Subject to contract” protects people from accidental agreements. This prominent legal phrase tells everyone that nothing’s binding until there’s a formal contract. Without these magic words, early talks might become binding contracts if they hit all the right notes.
Remember that negotiations starting with “subject to contract” stay that way unless everyone agrees to change it. Courts still look at all communications and what people did afterward to decide if there’s a binding contract.
Case Study: DAZN v Coupang and the FIFA Rights Deal
DAZN v Coupang’s recent high-profile case shows how casual digital messages can create legally binding contracts under UK law. This case revolves around FIFA Club World Cup broadcasting rights in South Korea. The court’s decision gives us a real-life example of how contracts form through digital communications.
Timeline of communications: 27 Feb to 3 March 2025
The companies talked mostly through WhatsApp, emails, and voice calls. Danny Kim from Coupang sent an email to DAZN’s Andrea Radrizzani on February 27, 2025. The email confirmed they would pay £1.35 million for co-exclusive broadcasting rights in South Korea. This email put into writing what both parties had already discussed informally.
A few days later, on March 3, 2025, DAZN’s Charles Ma replied by email: “I am pleased to accept Coupang Play’s offer for the FIFA Club World Cup 2025 we will start contract drafting and hope to share the draught for your agreement soon”. He quickly sent a WhatsApp message right after: “Just sent you an email to formalise our acceptance of your proposal for FCWC”.
Key phrases that indicated acceptance
The court found several phrases that sealed the deal. DAZN called Coupang’s message an “offer”. The acceptance came through clearly in both the email and WhatsApp message.
A crucial moment happened when DAZN got another offer. Coupang claimed “the deal was finalised” and DAZN’s team member replied “I know… leave it with me” without any objection. Later, when Coupang mentioned legal action, DAZN just said “I understand” – this showed they knew about the binding agreement.
Court’s interpretation of post-agreement conduct
The Court of Appeal looked at what happened after the emails. The judgement pointed to congratulatory messages between team members and marketing discussions as proof. These actions showed both sides knew they had a binding deal.
The court concluded that looking at all messages objectively, both parties “had reached an agreement by which they intended to be immediately and legally bound by the exchange of emails”.
Legal Tests for Contract Formation in the UK
Legal tests for contract formation help you steer clear of collateral damage in agreements. UK courts use specific criteria to determine if a binding contract exists.
Offer and acceptance in informal settings
Courts look at whether one party made a clear proposal (offer) that the other party accepted without question. Messages and emails need to be thoroughly read, including looking at the whole communication chain. A contract comes into existence only when someone gives final and complete agreement to the proposed terms.
Intention to create legal relations
Commercial agreements come with an assumption that parties want to create legal relations. Social or domestic arrangements work the opposite way. Business parties must clearly state if they don’t want legal binding – they often use phrases like “binding in honour only.”
Certainty of terms and consideration
Terms need enough specificity to hold up in court. Unclear agreements like “let’s discuss payment later” don’t work well in enforcement. Something of value must be exchanged as consideration. These fundamental rules are the foundations of valid consideration:
- Present or future, not past
- Of some value (though need not be adequate)
- Fresh, not an existing obligation
Courts refuse to enforce contracts with meaningless terms. Scammell v Ouston showed this when an agreement to provide goods “on hire-purchase” proved too vague to enforce.
Practical Advice to Avoid Unintended Legal Agreements
You need practical strategies beyond legal principles to protect yourself from collateral damage in contracting. These specific safeguards are vital to your business.
Use of ‘subject to contract’ in all informal discussions
Communications marked as ‘subject to contract’ create a strong presumption that parties do not intend to be legally bound yet. This label carries through all discussions once negotiations begin, unless both parties explicitly agree to remove it. The protection isn’t absolute though – courts will look at the whole context of communications to determine if a binding contract exists.
Avoiding contract law UK breach through clear communication
You should document all verbal exchanges right after they occur. Both parties must acknowledge any amendments in writing. Open dialogue throughout the contract’s lifecycle helps identify problems before they grow larger.
Documenting internal approval processes
Your business needs efficient contract review processes that show who can negotiate, approve, or sign agreements. A detailed approval policy should specify authorisation levels for different contract values or types. This well-laid-out approach helps prevent staff from accidentally going beyond their authority.
Conclusion
UK contract law makes it clear that casual conversations can lead to legally binding commitments. The DAZN v Coupang case shows how WhatsApp messages, emails, and phone calls can create formal agreements without traditional paperwork. Courts look at whether there’s an offer, acceptance, consideration, and intention to create legal relations instead of focusing on formalities.
So, you need to be smart about your business communications. A simple message showing agreement could bind you to terms you haven’t thought over. You should pay close attention to all business exchanges, whatever their casual nature might be.
You’ll need consistent safeguards to protect yourself from accidental contracts. Using “subject to contract” throughout your negotiations is your best defence. This time-tested legal phrase shows you don’t want to be bound until you’ve signed formal documents.
Digital communication has reshaped business interactions. The basic principles of contract formation haven’t changed though. Courts still use traditional tests for offer, acceptance, consideration, and intention—now applied to messaging apps and emails.
The best solution is always to seek expert guidance from the start. If you’re looking to enter any negotiations, get in touch with us at WCL. We can help you understand your obligations and can also prepare the necessary documentation for you. As the cliché goes, it’s better to be safe than sorry…
