When informal negotiations become binding: key lessons from DAZN v Coupang

The recent Court of Appeal judgment in DAZN Limited v Coupang Corp provides a stark warning to businesses negotiating fast-moving deals via informal channels.

The ruling affirmed that a binding contract, involving a $1.7m sublicence for broadcasting rights, was formed through instant messages and a short email exchange, despite no signed agreement.

The decision reinforces the objective test for contract formation under English law and highlights the risk of moving too quickly from informal agreement to legal commitment.

Background and the Commercial Court’s decision

The case involved the sublicensing of sports broadcasting rights for the 2025 Men’s FIFA Club World Cup. DAZN Group held the global licence from FIFA and was authorised to grant sublicences in various territories. Coupang Corp, a South Korean e-commerce company that runs the streaming service Coupang Play, sought to acquire co-exclusive live and Video-on-Demand rights for South Korea.

The key issue was whether a legally binding contract had been formed. In January and February 2025, both sides negotiated the commercial terms mainly via WhatsApp messages and phone calls.

On 27 February, Coupang’s representative emailed DAZN with a formal offer, which included all the essential terms and the $1.7m fee. On 3 March, a DAZN representative replied by email, stating they would “accept Coupang Play’s offer” and would begin drafting the formal contract, to be shared “soon.”

The following day, DAZN received a higher offer from a third party and tried to back out, arguing the agreement wasn’t binding. Coupang insisted a contract had already been formed and initiated proceedings in the Commercial Court.

The Commercial Court concluded that a binding contract had been formed on 3 March through the email exchange, supported by earlier communications. It granted Coupang specific performance (forcing DAZN to honour the deal) and an injunction to protect their rights. DAZN subsequently appealed the decision.

Court of Appeal’s decision and rationale

The Court of Appeal unanimously dismissed DAZN’s appeal. It confirmed that a contract is formed when there’s an offer, acceptance and an objective intention to create legal relations. In determining this, the court looks at what the parties said and did from the viewpoint of a reasonable commercial person.

Lord Justice Popplewell stressed the need to consider the “whole course of the parties’ negotiations”, affirming that a binding contract can be formed even if a formal document is expected later, provided all essential terms are agreed.

Key factors and rationale

• Offer and acceptance: Coupang’s 27 February email set out the essential terms (rights, exclusivity, territory and fee), amounting to a formal offer. DAZN’s reply on 3 March was an unqualified acceptance
• Conduct confirmed finality: later messages showed both parties considered the deal done. For instance, a DAZN representative sent a WhatsApp message saying they’d just emailed to “formalise our acceptance of your proposal.” Furthermore, after DAZN tried backing out and Coupang later warned of legal action, the DAZN representative replied “I understand”, implicitly acknowledging a binding legal obligation.
• Absence of qualifying language: neither party had qualified their discussions, particularly the key emails, with the phrase “subject to contract” or similar wording to reserve their position until a final document was signed.

Key lessons for businesses

The DAZN v Coupang judgment is a powerful reminder of how easily binding commitments can be made in today’s commercial landscape. To mitigate this risk, here are a few useful tips and procedures you can implement:

• Use “subject to contract”: the most effective way to prevent the inadvertent formation of a binding agreement is the clear use of protective language. Add this phrase to all formal correspondence (emails, drafts, heads of terms). Where deals are being discussed via informal means like WhatsApp or instant messaging, make it clear you don’t intend to be legally bound until a formal agreement is in place.
• Train employees on contract formation: make sure employees involved in commercial negotiations understand the legal implications of offer, acceptance and intention to create legal relations under English law – especially when using informal channels like email or WhatsApp.
• Implement clear internal procedures: set out when and how authority is granted to move from non-binding discussions to formal offers or acceptances.
• Consult legal counsel early: engaging in-house or external legal advisers at the start of negotiations is vital. They can help structure communications, use protective language and manage the transition from informal discussions to formal, legally executed contracts. This proactive step can prevent costly litigation down the line.