Back of the envelope contracting (again)this time via WhatsApp and email

In another example of the in-house lawyer’s worst nightmare, the UK Court of Appeal has upheld the assertion of a binding contract on the basis of a series of informal messages via WhatsApp and email despite what appears to have been a clear (and shared) expectation that formal documentation was to follow.

In DAZN Limited v Coupang Corp, the Court found that the messages were sufficient to form a binding contract to sublicence the broadcast rights to the 2025 FIFA Club World Cup.

Background

DAZN is a UK streaming platform that specialises in sports and entertainment.  It was awarded the global streaming rights by FIFA – on terms that allowed DAZN to sublicence the rights in different territories.  DAZN then began discussions with Coupang Corp (a Korean broadcaster) about a sublicense of the streaming rights for South Korea.

The discussions were between senior executives of DAZN and Coupang, predominantly via WhatsApp, email and occasional voice calls.

The discussions were described as initially being exploratory, but the tone changed, making reference to firm offers by late February 2025.  In particular:

• On 27 February 2025, an email from a Coupang executive to a DAZN executive confirming that Coupang was willing to offer USD $1.7m for the rights – and that the rights granted would be co-exclusive with DAZN (27 February email).

• On 3 March 2025, a DAZN executive responded by email, in which he noted

“I am pleased to accept Coupang Play’s offer for the FIFA Club World Cup 2025 we will start contract drafting and hope to share the draft for your agreement soon”

(the 3 March email).  The 3 March email was followed up by a WhatsApp message which said

“Just sent you an email to formalise our acceptance of your proposal for FCWC”.

Days later, DAZN attempted to pursue a rival bid initially for USD $3.5m. 

Coupang took urgent steps to enforce the agreement through the Courts – so that it could begin marketing.  At first instance the Court held that a contract had been concluded between the parties – and granted an injunction to prevent DAZN from sublicensing the rights to any other platform.

This decision was based on the 27 February email (offer) and the 3 March email (acceptance), and the background of communications between the parties via WhatsApp and the conversations that had taken place.  

Court of Appeal upholds the existence of a contract

On appeal, the UK Court of Appeal upheld the existence of a binding contract as a result of offer and acceptance, in the 27 February email and the 3 March email.  This was despite the fact that the parties anticipated signing a formal agreement at a later date – which presumably would have included additional terms.

The UK Court of Appeal took account of:

• all of the negotiations between the parties, before and after those which Coupang claimed created the contract;
• the references to start formal contract drafting – and if this meant that any agreement was subject to contract and didn’t have legal effect;
• whether the parties had agreed all the essential terms;
• that the businesspeople conducting the negotiations would often not use the precise language (such as that used by lawyers in contract drafting) – requiring a substance over form approach to the communications; and
• the relevance of the negotiations being conducted under urgency.

Overall, the Court held that it seemed clear that the exchange of emails meant that the parties had reached an agreement by which they intended to be immediately bound.

Unhelpfully for DAZN, following the 3 March email, when they advised Coupang that there was another interested party (and Coupang said that it would need to take legal action if the deal was not honoured) the DAZN personnel appeared to acknowledge the existence of a binding deal.

The UK Court of Appeal also took account of:

• DAZN actively encouraging Coupang to begin marketing without waiting for the long-form contract; and
• DAZN’s own evidence was that they generally negotiated ‘binding heads of term’ before moving onto long-form contracts (and recognised the heads of terms as being binding /enforceable).

Is this the General Counsel’s nightmare?

Whilst this decision provides some important reminders about contract negotiations, and the need to be clear if informal arrangements (e.g. letters of intent, term sheets and MOUs) are intended to be legally binding, it is not clear that a New Zealand court would reach the same conclusion. 

Generally, our courts are reluctant to enforce “agreements to agree” because of a lack of certainty about what is agreed.  Importantly however, framework agreements can be enforceable even if they are short and/or informal – and don’t clearly indicate that they aren’t intended to be binding or are “subject to contract”.  In simple terms, all that is required is a consensus on all essential terms – and involve a clear offer and acceptance.

Here, DAZN was up against a number of unhelpful issues, including the urgency of the negotiations, its own practices, some evidence of industry norms and other background matters (including some internal communications).  There were some project management own goals too – with different people within DAZN not keeping each other informed about dialogue with Coupang. 

The outcome, even if seen as marginal in a New Zealand context, highlights the need for good contracting practices and clearly understood approvals processes / authority for contract negotiations.

For more information, please do not hesitate to contact me.