WhatsApp messages form binding contract, court rules

Contracts executed via messages exchanged through WhatApp between two parties are valid and enforceable, the High Court has ruled.
“In conclusion therefore WhatsApp messages are data messages and therefore form a contract under Section 3 of the Contracts Act. Court finds that there was a valid contract between the Plaintiff and the Defendants,” Justice Patricia Kahigi Asiimwe ruled.

While citing a 2006 case from India, Justice Kahigi compared a traditional computer and a cell phone and held that a cell phone is a computer.
“The court also found that a cell phone is a computer under the definition of computer under section 2(1)(i) of the Information Technology Act of India,” the judge ruled, adding, “The definition of computer under the Information Technology Act of India is substantially similar to the definition of computer under the Electronic Transactions Act cited above.”

Justice Asiimwe of the Commercial Division of the High Court ruled that under the Electronic Transactions Act, the definition of data message is something that has to be stored by a computer. 
He proceeded to note that the data message was stored on a mobile phone in the case before him.

“Under Section 2 of the Electronic Transactions Act a computer is defined as an ‘electronic, magnetic, optical, electrochemical, or other data processing device or a group of such interconnected or related devices, performing logical, arithmetic or storage functions; and includes any data storage facility or communications facility directly related to or operating in conjunction with such a device or a group of such interconnected or related devices’,” the judge held.
Justice Asiimwe held that the complainant presented WhatsApp messages as proof of the contract. 

The court observed that the messages indicate that there was an offer made, which was accepted, and that the services were provided therefore there was a contract. The bone of contention therefore was whether such a contract concluded via WhatsApp is a valid contract.

According to Justice Asiimwe, under Section 10 (3) of the Contracts Act, a contract is in writing where it is (a) in the form of a data message; (b) accessible in a manner usable for subsequent reference; and (c) otherwise in words.

The case
The court decision followed a case in which Dr Rodney Mugarura sued the city private medical facility, Paramount Hospital Kampala Ltd and Dr Simon Begumisa, seeking a declaration that they were in breach of an agreement with the defendants for the provision of professional medical services.
He sought orders to have the accused parties pay the outstanding amount of Shs41.5 million, general damages of Shs100 million interest, and legal costs incurred by the complainant.

Court documents show that the case proceeded ex parte (done with respect to or in the interests of one side only or of an interested outside party) under Order 9, Rule 10 following the failure of the defendants to file their written statements of defence despite service.

Chain of events
The court heard that in September 2019, Dr Begumisa approached Dr Mugarura and introduced himself as the director of the medical facility through a WhatsApp message. 

The former informed the latter how the hospital runs many departments, including orthopaedic surgery. 

Dr Begumisa also disclosed that the hospital works with many surgeons who are given operating rights and the rights to charge their professional fees. Dr Mugarura was also told that the hospital in question desired to work with him under a similar arrangement.

According to court records, Dr Mugarura and Dr Begumisa met and agreed that the former would be called in whenever his services were required. 
Dr Mugarura consequently agreed to treat several patients and it was agreed that his invoices for his professional fees, surgical implants used in the surgeries, or other services would be provided in the process of attending to the patients.
Despite several demands for payment, Dr Mugarura told court that the accused did not pay the money.

Verdict
Justice Asiimwe faulted Paramount Hospital Kampala Ltd and Dr Begumisa for breach of contract, reasoning that they failed to file written statements of defence and that there is no evidence of payment of the money due to the complainant.

“…where a contract sets out promises to be performed by either party to a contract, in the event the same are not performed as per the terms of the contract without any justification as provided for under the contract, a party at fault is said to have breached the contract,” the judge held.
Justice Asiimwe ordered the medical facility and Dr Begumisa to pay the complainant Shs41.5 million with 20 percent interest. The judge held that a party who suffers the breach is entitled to receive compensation from a party who breaches the contract, compensation for any loss or damage caused to him or her.

What experts say
Mr George Musisi, a lawyer at PACE Advocates, said that the judgment is enforcing contracts made by electronic means, phones and computers, among others.
“It is a welcome move given that a huge number of people actually contract everyday through those means, and at times enforcement of those obligations is hard,” Mr Musisi told Monitor, adding, “It also shows that courts are alive to the many developments in technology and are moving to embrace the same.”

The lawyer also reckons the court decision is setting a precedent for many other enforcement of such contracts.
“The only point of caution is that courts have to strongly warn themselves against the danger of abuse, electronic impersonation and forgeries, which are common in the technology world,” he offered.

The law

Under Section 14 of the Electronic Transactions Act, No 8 of 2011 it is provided as follows:
(1) A contract shall not be denied legal effect merely because it is concluded partly or wholly by means of a data message.
(2) A contract by means of a data message is concluded at the time when and the place where acceptance of the offer is received by the person making the offer.