On April 16, 2025, the High Court of Justice in England and Wales issued a significant decision in Jaevee Homes Limited v Mr Steve Fincham ([2025] EWHC 942 (TCC)), addressing critical issues in construction law, including contract formation, the application of the Housing Grants, Construction and Regeneration Act 1996 (as amended) (the "Act"), and the validity of payment notices under the Scheme for Construction Contracts Regulations 1998 (as amended) (the "Scheme").
Background
The dispute arose from demolition works at the former Mercy nightclub in Norwich, undertaken by the defendant, Mr. Steve Fincham (trading as Fincham Demolition), for the claimant, Jaevee Homes Limited, a property developer. The claimant sought declarations to establish the terms of the contract and to challenge the validity of four invoices (INV 1078, INV 1079, INV 1081, and INV 1083) issued by the defendant, which formed the basis of an adjudicator’s decision awarding £145,896.31 to the defendant. The claimant argued that the invoices did not constitute valid payment applications or default payment notices under the Act or the Scheme.
Key Issues
The court addressed primary declarations sought by the claimant:
- Whether the contract was formed under Jaevee’s standard written sub-contract terms.
- Alternatively, whether a basic contract was formed via email and WhatsApp communications, including a requirement for monthly payment applications.
Court’s Findings
Contract Formation
The court rejected the claimant’s argument that the contract was governed by its written sub-contract terms sent on May 26, 2023. Instead, it held that a binding contract was formed on May 17, 2023, through WhatsApp exchanges between the parties. The court found that these messages, though informal, constituted a concluded agreement.
The court dismissed the claimant’s contention that essential terms (e.g., the identity of the contracting party, duration, or start date) were missing, noting that:
- The claimant’s involvement was clear from earlier communications.
- Duration and precise start dates were not essential, with implied terms for reasonable completion applying.
- Payment terms were sufficiently agreed upon, with the Scheme filling any gaps.
The court emphasized that the WhatsApp exchanges demonstrated the parties’ intent to form a binding agreement, applying a “traditional offer and acceptance analysis” per Tekdata Interconnections Ltd v Amphenol Ltd ([2009] EWCA Civ 1209).
Implications
- Informal Contract Formation: The decision underscores that contracts can be formed through informal communications like WhatsApp, provided they evidence offer, acceptance, and intent. Parties should exercise caution in casual exchanges to avoid unintended binding agreements.
- Payment Notice Requirements: Contractors must ensure payment applications clearly specify the sum due and the basis for calculation, but lump sum contracts may require less granularity. Courts will adopt a practical, context-driven approach to validity, avoiding overly technical objections (Advance JV v Enisca Ltd [2022] EWHC 1152).
Conclusion
The Jaevee v Fincham decision provides valuable guidance on contract formation and payment notice validity in construction disputes. While this decision originated from the High Court of Justice in England and Wales, it would certainly form a persuasive authority in the Kenyan courts given that Kenya largely mirrors the British legal system and being a commonwealth jurisdiction.
