Signed, Sealed… Sent on WhatsApp! When can messages become legally binding?

Informal messaging services have played the main character in legal disputes concerning contract formation in the last few years. As technology develops, informal communications are becoming the new norm, so when does a conversation become a contract?

The recent High Court decision in Reid‑Roberts & Anor v Mei‑Lin & Anor (Reid v Mei-Lin) has pushed this question further, forcing the court to consider not only how contracts can arise through ‘WhatsApp’ messaging, but also whether such messages can meet the statutory formalities required to transfer a beneficial interest in land.

In a previous article written by Sophie Taylor, the case of ‘Jaevee v Fincham’ discussed how contracts can be created through messages. It was held by the high court that the essential elements of a contract were present, despite there being a previous written contract signed by the parties. This case highlighted how informal WhatsApp messages could create legally binding relationships.

A further case highlighted in an article written by Benedict Wills built upon this idea. DAZN v Coupang found that a combination of informal WhatsApp and email communications created a valid contract between the parties. This was especially notable as the parties had not entered into any formal written contract previously (unlike Jaevee v Fincham), the mere intention to draft a future contact (along with the other necessary elements of a contract) was enough for the court to determine there was a legally binding agreement between the parties.

So, how does Reid v Lei-Min contribute to the ever-changing law on contract formation?

The courts discussed key issues surrounding the disposition of property (which this article will not discuss), the key outcome, was that there was no immediate disposition of the property through text messages. However, the judgement went further to discuss whether the signature requirements under the Law of Property Act 1925 (LPA) were met by a ‘WhatsApp header’. Under the legislation, no interest in land can be disposed of ‘except by writing signed by the person creating or conveying the same’. Essentially, if you want to transfer your property, you must do so in writing and sign it. Sounds simple right?

Well, in Reid v Mei-Lin, it was agreed by the parties that a WhatsApp message (and possibly other forms of informal messaging) could be signed by the sender if they include a signature or sign off in the body of the message. However, the respondent argued that the header of a message which displayed the name of the sender, did not constitute a signature under the LPA.

The case of Neocleous v Rees was drawn upon by the appellant where an email signature, which is automatically added by the email provider, could amount to a valid signature under the legislation and be shown as the intention to create legal relations. It was argued this automatic addition was akin to the WhatsApp platform where the header of a message is also automatically added, giving valid sign off to its contents.

The key point raised in the judgement, was that the header of a message was ‘analogous to the email address that is added by the relevant service provider to the top of an email’ not the signature. The key difference is that this is not part of the actual message itself, but is a mechanism used by a service provider to identify a sender. Therefore, the court decided that the ‘sign off’ for the messages contained in the header was incidental to the message, and not an integral part of it.

What does this mean for Contract Law?

Although it is absolutely possible to create legally binding contracts over informal messaging services, this does not automatically negate requirements imposed by other relevant legislation. But… There is always a chance that the appeal in Reid v Mai-Lin could have succeeded. If the parties had the exact same conversation over email, in theory the signature requirements of the LPA would have been satisfied as the signature would have been included in the body of the message, and this could have given effect to the disposition of land.

The important point to note from this case, is that you should always be careful when discussing terms over informal messages. A belt and braces approach may end up saving you a lot of time and money in the future, if you want to be protected from accidental agreement to various terms, ensure that the wording ’subject to contract’ appears throughout informal messages. This will prevent you from becoming bound to specific terms until you agree them in a written contract.

Contract formation can be a mine field and with the increase focus on technology, there are more risks than ever before. If you have a contract you need assistance with, the Geldards commercial team is on hand to assist you.