The case of Jaevee Homes Limited vs Fincham considers issues that are not only important to those in the construction industry but also to anyone engaged in contractual relationships.
It explores whether a contract can be concluded via WhatsApp messages. For those in the construction industry, it also serves as a valuable reminder of the Scheme for Construction Contracts – default legal rules that may apply to construction contracts – and the court’s approach to the validity of payment notices.
Michael Kitson examines the decision and the key lessons it offers.
Background
The case arose from a payment dispute between a property development company (Jaevee Homes) and a demolition contractor (Fincham Demolition) for demolition works in Norwich.
Negotiations about the demolition contract began in early 2023 and the contractor provided a written quotation on 11 May 2023 for £256,000 +VAT. Email correspondence about the duration of the works followed (without agreement) and by 16 May 2023 the contractor had reduced its price to £248,000 + VAT.
On 17 May 2023, a WhatsApp exchange between the parties finished with:
[Contractor]: Are we saying it's my job mate so I can start getting organised mate
[Developer]: Yes
[Developer]: Monthly applications
[Contractor]: Are you saying every 28 or 30 days from invoice that's a yes not on drawdowns then good d) call you at 8.30 mate Thanks mate appreciated Ben.
[Developer]: Ok. Chat in the am.
The contractor saw that exchange as concluding the contract. The developer interpreted it as a ‘staging point’ and later sent its standard terms and a purchase order. The contractor started demolition on 30 May 2023, without having responded to the standard terms.
The contractor then issued four invoices between 9 June 2023 and July 2023 expecting payment within 30 days. The developer believed the invoices were premature and too frequent relative to its standard contract terms. It made some payments, but the parties fell into dispute and the developer terminated the contract in December 2024.
Seeking recourse, the contractor pursued adjudication – a fast-track dispute resolution process under the Housing Grants, Construction and Regeneration Act 1996 (the “1996 Act”). It obtained a decision for £145,896.31 but the developer refused to pay. The contractor sought to enforce that decision, but the developer asked the court for a ruling on the formation (and thus terms) of the contract.
Contract formation
The developer argued that the WhatsApp messages did not conclude the contract due to uncertainty about the employing party’s identity and the lack of agreement of certain “essential terms”, including the duration of the works, the start date, and the payment terms.
The developer argued that its standard contract terms applied – as they filled in the terms which were missing or not agreed by 17 May 2023 – and those terms were implicitly accepted when work started.
The court rejected those arguments, deciding that:
- The contract was clearly with Jaevee Homes.
- In the absence of an agreed duration, it was implied that the work was to be completed within a reasonable time.
- Objectively a start date had been agreed, but it was not an essential term.
- As the contract was a “construction contract” under the 1996 Act, missing payment terms could be provided by the Scheme for Construction Contracts.
- Crucially, there was no indication that a concluded contract depended on any other matter (e.g. agreement to the developer’s terms).
The court ruled that the WhatsApp messages had, notwithstanding their informality, concluded a contract based on the preceding emails and correspondence between April 2023 and 17 May 2023. Agreement on the scope of the works, price, payment terms and start date was all that was required to conclude the contract as, for construction contracts, the remainder could be implied by common law or statute.
Key takeaways – contract formation
This is a reminder for businesses to be mindful of their correspondence when negotiating a contract. A court will look objectively at the content of communications and the intent with which they are sent rather than drawing conclusions based on how they are sent.
Parties will obviously be concerned about entering into a contract by accident. If you do not intend to contract at a particular time, that needs to be clear to an objective observer (e.g. mark correspondence as “Subject to Contract”).
Parties will also want to:
- Give the other party their contract terms as soon as possible. The outcome here could well have been different if the developer had issued its standard terms when seeking the quotation.
- Be aware that with informal messages, there is greater scope for ambiguity or conflict.
- Consider whether their business needs training or policies on the use of different communication channels.
- Avoid actions that may imply agreement to a ‘basic’ contract or undesirable terms (e.g. starting work or making payments).
Payment terms and the statutory rules
The court then had to interpret what had been agreed regarding payment and, if there were gaps, how much the Scheme for Construction Contracts would step-in. That is an issue specific to construction contracts. The court decided that:
- The contractor could submit one payment application per month, with payment in 30 days. Applications could be at any point in the monthly payment cycle, which ran from the contract conclusion date (i.e. 17 May).
- One invoice was invalid, as two applications had been submitted in the same cycle.
- The contract did not say how to calculate the sums the contractor was entitled to, but The Scheme for Construction Contracts could fill that gap.
Key takeaways - payment terms
There are two key takeaways from this element of the judgment: clearly document any agreed payment terms and remember that if a construction contract’s payment terms do not comply with the 1996 Act, then the Scheme will step in “to the extent” necessary.
Were the payment applications sufficient?
The court then looked at whether the invoices met the requirements of the 1996 Act and the Scheme. This was an issue because while the invoices listed items of completed work, they didn’t provide any numerical itemisation or breakdown.
The developer therefore argued that the invoices failed to set out the basis on which the sum claimed was calculated (so could not be default payment notices under the 1996 Act).
In a useful review of the case law on interpretation of payment applications and notices in construction contracts, the court highlighted the following key principles:
- Notices are interpreted objectively — it's about how a reasonable recipient would understand them in the relevant context, not how the recipient saw the notice.
- A commonsense, practical approach is taken to the contents, with the court being unimpressed by “nice points of textual analysis” or contrived arguments.
- Notices must comply with statutory (and, if more restrictive, contractual) requirements.
- They should be unambiguous and objectively intended to be payment applications or notices. However, there was no need to cite particular contract clauses or be titled “payment notice” etc.
Applying these principles, the court found the invoices were sufficient. A reasonable recipient would have understood them as applications for payment and the level of detail they contained was consistent with the simple contract to which they related – the lump sum price in the contract meant the contractor could not add anything else to show the basis on which it was claiming the requested sums.
Key takeaways – payment applications and notices
The court’s decision on the invoices will not be surprising to construction lawyers but it is positive to see the court’s emphasis on practicality and flexibility in interpreting payment notices.
Final thoughts
By placing substance over form, the judgment reinforces the importance of clarity, consistency, and timing -whether you're negotiating by email, WhatsApp, or issuing payment applications.
In an industry where disputes often arise from misunderstandings rather than malice, this case highlights the value of good and proactive communication at every stage.
Published 18 June 2025
