Social media and instant messaging platforms are fast becoming part of how businesses communicate with clients and customers. It is now common to negotiate projects, provide fee quotes, confirm instructions and build business relationships using channels such as LinkedIn, WhatsApp and Instagram. However, have you considered these seemingly innocuous interactions may inadvertently be forming legal contracts?
‘Recent case law indicates that informal digital communications between a business and potential or existing customers may create binding agreements.’ comments Liam Voysey, an Associate Solicitor in the Commercial Law team with HK Law. ‘If, as a business, you regularly communicate using these channels, you should consider whether you are entering into binding contracts. If so, how does this sit with your current terms and conditions? Are your terms and conditions properly incorporated into your contract? Do they need updating to reflect the practical ways you are doing business?’
The basis of a contract
Under English law, a contract does not need to be signed, or even in writing, to be legally binding. A contract arises where the following elements exist:
- Offer – a proposal from one party to the other, setting out the proposed terms of a contract (for example, by way of a fee quote, a product sale or a scope of work);
- Acceptance – the other party agreeing to the terms being offered;
- Consideration – the value attached and exchanged as part of the contract (this is often payment in monetary terms for services or goods); and
- Intent – the parties have to show intention to create the contract and legal obligations between them.
Traditionally, formal written contracts have been the evidence courts have looked to in order to determine whether a legally binding contract has been formed and on what terms. However, with the invent of social media and other digital communications, less formal contracts are also being recognised. This includes contracts via email, messaging and social media platforms.
Can a contract be formed by WhatsApp?
In the case of Jaevee Homes Ltd v Fincham (2025), the court concluded that as long as the four above elements of a contract were present, exchanges through WhatsApp can constitute a legally binding contract, even though they may be informal.
This case highlights how easily this can be done through casual conversation, where a mixture of messages discussing scope, timing and price was considered enough to establish the terms of a contract. After discussion of terms, the building contractor then asked ‘Are we saying it’s my job…?’ and the client simply confirmed. The court held this as enough to establish a legally binding contract between the two parties. The client’s terms of business (which were never signed by the contractor) were not incorporated into the contract.
What does this mean for your business?
In light of the above, it is important to consider some of the risks you may face if you frequently use platforms such as WhatsApp for commercial discussions with prospective customers. These risks include:
- The ease with which contracts can come into effect. A simple response, such as using an emoji ‘thumbs up’, a reaction ‘heart’ or any other positive indication may be interpreted as acceptance of an offer on terms already discussed. You should also consider whether employees are using these platforms on behalf of your business.
- Overriding your terms and conditions. If you have standard terms and conditions but then you bind your business into a contract via social media, there is a risk you may not have incorporated your terms and conditions into that contract at all, or it may create conflicts with your terms and conditions. Consider, are you signposting prospective clients to your terms of business before you agree a contract over social media?
- Pitfalls of using multiple communication methods. If discussions are spread out between email, social media platforms and even text messages, there is increasing risk of uncertainty in establishing what was actually agreed and when, thus also making it harder to retain copies of such correspondence too.
Practical steps to take and how we can help
The risks mentioned above are not exhaustive and so if your business regularly uses social media for communicating terms and dealing with clients, there are steps you can take to mitigate those risks, for example:
- Review of communication protocols. Determine if you need to restrict platform use for negotiating or confirming commercial agreements. Do you only use one platform for ease of reference and certainty? Do you only grant that access to certain employees to overcome the possibility of conflicting messages?
- Review of internal policies and training. Do you need to train and guide your employees on the risks inherent with the use of messaging platforms for concluding business? Do you need standard wording to share with potential clients or customers when you first begin discussions on a platform?
- ‘Subject to contract’ caveat. Where discussions are ongoing or clearly not intended to be binding, it is prudent to state those communications are ‘subject to contract’ until a formal agreement is reached. This makes intention to NOT enter into a contract at that time clear.
- Review record keeping. Consider how you would ensure you have access to digital communications relevant to contracts and how to retain that information. For example, if employees are using their personal phones for such communications, have you got procedures in place to allow you access to those relevant interactions after that employee leaves?
- Review of your terms and conditions. Consider when you last reviewed your terms and conditions. Are you doing something that renders any clause in your terms and conditions invalid? Is it time to update your terms and conditions so they accurately reflect the way you conduct business and conclude client contracts?
Using a messaging platform to secure a deal or get a sale nailed down quickly can help keep your business competitive in a fast-paced world, but it is possible to take advantage of that without exposing your business to inadvertent risks and contracts you did not intend to bind yourself to.
Whether it is practical steps such as conducting a review of how you currently operate and aligning that with your terms and conditions, or developing prudent internal protocols to protect you, our Corporate and Commercial team can help you safeguard your business successfully.
For further information, please contact Liam Voysey in the Corporate and Commercial team on 01305 252573 or email l.voysey@hklaw.uk.
HK Law has offices in Bournemouth, Blandford, Crewkerne, Dorchester, Poole, Swanage, and Wareham.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
