Is an invoice just containing a list of work a valid payment application?

In Jaevee Homes Limited v. Steve Fincham t/a Fincham Demolition [2025] EWHC 942 (TCC), the contractor (Jaevee) engaged the sub-contractor (Fincham) to carry out demolition works at the former Mercy Nightclub in Norwich, and a dispute arose about payment.

The court had to resolve two main issues: the first about the contract formation, and the second about what ‘setting out the basis of calculation’ meant for the purposes of a payment application.

Can contracts be formed by WhatsApp?

First, the court decided that an exchange between the contractor and sub-contractor by WhatsApp formed a binding contract. It found that a scope of works was agreed, rough payment terms (supplemented as necessary by implication by the Construction Act and Scheme), and a starting date.

In particular, following an exchange about scope and the starting date, the sub-contractor messaged on 17 May 2023 stating “Ben Are we saying it’s my job mate so I can start getting organised mate”. Ben, a reference to Ben James of Jaevee, responded on the same day stating “Yes”. The court said that this was “redolent of a concluded agreement”. In the following few hours there was a further exchange about payment periods, which the court said “concluded the agreement”.

Is an invoice containing a list of work carried out and a single sum due a valid payment application?

The sub-contractor, Fincham, submitted a series of invoices to the contractor, Jaevee. The invoices contained a list of work carried out and a single sum due. As an example, the sub-contractor’s first invoice listed six activities carried out and stated “First Interim Payment £48,000 + 5% VAT”.

The contractor issued a Part 8 claim and alleged that the sub-contractor’s invoices were not valid payment applications because they did not set out the basis of calculation for the sum due (as required by section 110A(3)(b) the Construction Act).

The court said that assessing whether the basis of calculation was set out was a question of fact and degree which must consider the context of the contract. Considering the terms of the sub-contract and the context in which they were issued here, the majority of Fincham’s invoices were valid applications. The relevant factors included: the lump-sum nature and terms of the sub-contract; that the sub-contractor’s invoices could be read together with its quotation; and the parties’ previous dealings under other contracts.

A secondary question was whether the invoices were intended as payment notices. The court endorsed Fincham’s submissions that “The Claimant’s arguments as to the requirements of the Contract, the application of the Scheme and the requirements for the Invoices are divorced from the factual context and, with respect, the reality as to how these sorts of contracts can and do operate“. Again then, the court encouraged a fact-sensitive consideration of payment notices and their intent.

Conclusion

The fact that a contract can be concluded by WhatsApp is perhaps not surprising, but this does indicate the importance that the court will place on those exchanges. Parties should be careful about what they say on messaging applications like this, particularly if they don’t intend to reach binding agreements – if that is the case, they will need to make that clear from the outset.

In terms of the payment application, the decision confirms that the court will take a holistic view of whether a document is a valid payment application and a mathematical breakdown of the sum due is not strictly necessary, as well as confirming that attention needs to be paid to the context in which notices are served. Given the test – setting out the basis of how the sum was calculated – also applies to payment notices and pay less notices, it will be interesting to see how the courts address this going forward.

Archor acted for Fincham in this case, with Andrew Rush, Liam Hendry and Megan Green instructing James Frampton of Keating Chambers.