Businesses negotiating deals by email, WhatsApp or other digital platforms may inadvertently enter into legally binding agreements before any formal contract is signed. In DAZN Limited v Coupang Corp. [2025] EWCA Civ 1083, the Court of Appeal (CA) upheld the Commercial Court’s decision that parties formed a binding contract through WhatsApp messages and emails before any formal agreement was finalised or signed. The decision reflects a growing reality for businesses operating in fast-paced digital environments and is a cautionary example of how informal exchanges can carry significant legal consequences.
Brief background
FIFA[1] was the sole owner of the broadcasting rights for the FIFA Club World Cup[2] which it licensed to the DAZN group of which the appellant DAZN was a part. DAZN was authorised to sublicence those rights in different territories and entered negotiations with Coupang (a South Korean e-commerce and streaming service provider) for co-exclusive broadcasting rights in the South Korean market. Coupang claimed a binding contract had been concluded, which DAZN denied.
What was the key issue?
The Commercial Court held that a contract had been concluded by email, against a backdrop of WhatsApp messages, and that Coupang was entitled to specific performance. The judge granted declarations and injunctive relief enabling Coupang to enjoy its broadcasting rights. On appeal, the main issue was whether a binding contract had been formed.
Legal principles of a binding contract
The established legal principles for determining whether a binding contract has been formed, as summarised in Smit Salvage BV v Luster Maritime SA (The Ever Given)[2024] EWCA Civ 260, [3] , were not in dispute. Lord Justice Popplewell noted four aspects of the principles warranting further attention:
- The importance of considering the negotiations as a whole, both before and after the communications said to have formed a binding contract.
- Where the parties agree to a subsequent formal written contract, the extent to which the essential terms have already been agreed.
- The importance of interpreting the language used by business people in commercial negotiations, by reference to the substance and sense of what was said.
- The relevance of negotiations conducted in a context where performance of any agreement reached is urgent.
What were the relevant communications?
Negotiations between both parties took place over approximately eight weeks through WhatsApp and email. By early March it appeared that agreement had been reached, confirmed by email exchanges on 27 February and 3 March 2025.
Coupang’s email to DAZN on 27 February 2025 confirmed the proposal, including reference to the competition and the subject matter (broadcasting rights), the territory and financial consideration.
DAZN’s email reply on 3 March 2025 confirmed acceptance of Coupang’s offer and that contract drafting would commence. WhatsApp messages also confirmed DAZN’s formalisation of acceptance.
The following day, DAZN informed Coupang that a substantially higher offer had been received, although they would be “working internally to stay committed in what was agreed”. Communications continued over the following week regarding marketing, and preparation and receipt of the formal contract.
Exchanges deteriorated on 12 March when DAZN advised Coupang that the competing offer had increased further. Matters concluded on 14 March with Coupang threatening legal action to which DAZN’s representative responded, “I understand”.
What were the grounds for appeal?
DAZN argued that no contract was concluded by the 27 February and 3 March 2025 emails because:
- The 27 February email did not amount to a contractual offer; it did not objectively demonstrate an immediate willingness to be bound upon acceptance.
- The 3 March email was not an unqualified acceptance.
- There was no intention to create legal relations by the exchange of emails because any agreement was subject to the parties’ intention to sign a formal agreement.
The challenge was limited to whether there was (i) an offer, (ii) acceptance of the offer, and (iii) an intention to create legal relations. The CA noted that “insufficient agreement on essential terms” was not a part of DAZN’s case.
The appeal failed.
On the first ground, the CA analysed the communications as a whole and concluded that the parties intended the agreement reached by their email exchanges to be immediately binding.
While Coupang’s email as a whole was not “in perfect idiomatic English”, its sense in context clearly conveyed a formal contractual offer, and DAZN’s email purporting to “accept” it treated it as such. The 27 February email gave a clear indication that Coupang expected to be bound upon acceptance.
The second ground also failed with the CA finding the words “I am pleased to accept Coupang’s offer…” to be unequivocal.
On the third ground, the CA examined the communications between parties through their language and conduct and found no indication that a formal contract was a prerequisite to being legally bound by the agreed terms. Indications that the deal was regarded as final included:
- DAZN’s view that Coupang could begin marketing without waiting for the formal agreement;
- DAZN’s response of “I understand” to Coupang’s reference to taking legal action if the deal was not honoured; and
- The absence of any qualifying language such as “subject to contract”.
Binding contracts in a New Zealand context
This case illustrates a very real scenario for businesses agreeing key deal terms through digital communications, particularly in international settings.
While New Zealand courts have not yet considered contract formation through WhatsApp exchanges in a reported case similar to DAZN v Coupang, they would likely approach the issue in a similar way. In Electricity Corporation of New Zealand Ltd v Fletcher Challenge Energy Ltd[4] the Court of Appeal held that contract formation depends on whether the parties objectively intended to be immediately bound and had reached agreement on all essential terms, assessed in the context of the negotiations and surrounding circumstances. Consistent with those principles, in Williams v Cazemier[5] the High Court considered whether an exchange of emails had displaced an earlier expectation that the parties would not be bound until a formal agreement was signed, holding that there was a reasonably arguable case that a binding contract had arisen.
If parties wish to ensure that no binding contract is in place until a formal agreement is signed, this should be expressly stated throughout their communications, for example with the rider “subject to contract” and avoiding language that suggests a deal has been finalised. While such statements may not be conclusive on their own, as courts will likely look at the wider context of the parties’ communications as a whole, as well as their actions, they will provide a strong indication of an intention not to be legally bound until contract formalisation.
If you have any questions about this case or contract terms that you are or will be negotiating, get in touch with our Corporate and Commercial or Trade and Transport team, or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
