Informal Communications Can Create Binding Contracts

The Court of Appeal has recently reaffirmed a crucial principle in contract law: a legally binding agreement can arise even in the absence of a formally executed document. In this case, the Court considered whether negotiations conducted via email and WhatsApp messages were sufficient to establish a contract between the parties.

Background

A global rights holder for the FIFA World Cup entered into negotiations with an e-commerce company regarding the sub-licensing of broadcast rights in South Korea. The proposed arrangement was for the e-commerce company to share the rights on a ‘co-exclusive’ basis with the rights holder.

These discussions took place during January – February 2025 and were carried out via email and WhatsApp messages.

The e-commerce company considered that a binding agreement had been reached, but the rights holder disagreed and claimed that only a non – binding agreement had been made in principle.

The matter proceeded to trial, and a declaration was granted that a binding contract had been concluded.

The rights holder appealed the decision, arguing that no formal agreement had been executed and therefore no contract existed.

Court of Appeal decision

The Court of Appeal dismissed the appeal and upheld the decision that a contract had been formed, and in making the decision relied upon the facts that the parties had negotiated and settled key terms by WhatsApp messages and email.

This judgment serves as a timely reminder that the Courts will look beyond the formality of documentation and focus on the substance of the parties’ interactions. Where the essential terms of an agreement are settled—even via platforms like WhatsApp or email—a binding contract may be found to exist.

The case underscores the importance of exercising caution during negotiations, particularly when using informal channels of communication. Businesses should be aware that even casual exchanges can carry legal weight and may result in enforceable obligations.

In the event of a dispute where no formal contract exists, it is vital to seek advice from experienced commercial litigation solicitors. Early legal intervention can help protect your interests and facilitate a swift and effective resolution.