Validity of Invoices and Formal Contracts

Is an invoice containing a list of work completed but without a mathematical breakdown a valid application for payment?

This question was addressed in the recent decision of Jaevee Homes Ltd. v Mr. Steve Fincham (trading as Fincham Demolition) [2025] EWHC 942. The court also considered the extent to which WhatsApp messages can form a contract in the absence of certain agreed terms.

Key Takeaways

• Informal WhatsApp messages can constitute a contract. 
• Failure to agree on the duration, start date and payment terms applicable to works do not preclude formation of a contract.
• Payment applications that only list the works completed can constitute a valid application for payment despite no mathematical breakdown being provided.

Background

Developer Jaevee Homes Ltd. (the “Developer”) engaged Steve Fincham (trading as Fincham Demolition) (the “Contractor”) for demolition works (the “Works”) at a site in Norwich. The Works commenced in late May 2023. 

A dispute arose concerning the amount of work carried out and the sums due to the Contractor pursuant to four invoices in the sum of £195,857.50 plus VAT (together, the “Invoices”). Of those Invoices, only £80,000 had been paid by the Developer which, on the Contractor’s case, left £125,650.38 payable (the “Outstanding Sum”).

The Developer purported to terminate the Contractor’s employment, and the Contractor served a statutory demand on the Developer for the Outstanding Sum. An injunction restraining the presentation of a winding up petition was granted in the Developer’s favour, and the Contractor was ordered to pay the Developer’s costs of £18,000 (the “Costs Order”). The Contractor failed to pay the Costs Order.

In a further attempt to recover the Outstanding Sum, in July 2024, the Contractor commenced an adjudication against the Developer on the basis that no pay less notices had been served in respect of the Invoices. 

In the adjudication, the main issues in dispute were whether the Invoices were valid payment applications and what terms had been agreed between the parties. This is discussed in more detail below but, in summary, the Adjudicator found that WhatsApp messages exchanged on 17 May 2023 concluded the contract between the parties and that various documents, including a formal subcontract, issued by the Contractor after that date and later WhatsApp messages did not form part of the contract. By a decision dated 11 September 2024, the Adjudicator found in the Contractor’s favour and ordered the Developer to pay the Outstanding Sum to the Contractor along with interest and compensation for late payment. The Developer was also ordered to pay the Adjudicator’s fees. 

The Developer failed to comply with the adjudication decision, and the Contractor issued court proceedings to enforce it. Summary judgment was granted and, after setting off the Costs Order, the Developer was ordered to pay the net sum of £137,472.12 to the Contractor (the “Enforcement Order”). The Enforcement Order was not complied with, and the Developer started further court proceedings to challenge the adjudication decision (and thereby the Enforcement Order). 

Court’s Decision

The Judge, Mr. Roger ter Haar KC, granted two declarations in the Contractor’s favour. 

1. When, how and on what terms had the parties entered into a contract?

The Judge found that the contract was formed by emails and WhatsApp messages exchanged between April 2023 and 17 May 2023. Such messages established the Contractor’s entitlement to issue monthly payment applications (at any stage during each monthly cycle) which became payable 28 to 30 days following the Developer’s receipt of an invoice. The fact that emails were sent to the Developer using a different company name did not prevent the contract from forming. Viewed objectively, the contract was between the Contractor and the Developer.

The Judge also found that failure to agree on the duration, start date and payment terms for the Works were not essential terms which precluded a concluded contract.

2. Were the Invoices valid applications for payment?

As the contract made no provision for how monthly instalments were to be calculated, the Judge concluded that the Scheme for Construction Contracts (England and Wales) Regulations 1998 (as amended) applied. 

The Judge found that the Invoices sufficiently set out the basis on which the sums claimed were calculated despite such Invoices only listing the Works completed and there being no mathematical breakdown to the overall sum claimed or valuation of each item.

On further analysis, however, the Judge found that only three of the four Invoices were valid. One invoice was invalid because it was the second invoice issued that month, and the Contractor was only entitled to submit one invoice per month. 

While failure to agree on the duration, start date and payment terms for works is not essential to concluding a contract, parties should always try to agree on such provisions to promote certainty and to avoid costly disputes later down the line.

Analysis

This case demonstrates that having a formal signed document in place is not necessarily a prerequisite to a legally binding contract being formed. While failure to agree on the duration, start date and payment terms for works is not essential to concluding a contract, parties should always try to agree on such provisions to promote certainty and to avoid costly disputes later down the line. 

The Court’s analysis of the contents of the invoices in this case will also be of interest to parties operating in the construction industry where validity of payment applications is a hotly contested topic in payment disputes.

This article contains information of general interest about current legal issues but does not provide legal advice. It is prepared for the general information of our clients and other interested parties. This article should not be relied upon in any specific situation without appropriate legal advice. If you require legal advice on any of the issues raised in this article, please contact
one of our specialist construction lawyers. © Hawkswell Kilvington Ltd. 2025.