Common Mistakes Businesses Make When Negotiating a Business Deal

December 19, 2025

In a time where deals can be struck over email, WhatsApp, and even phone calls, businesses often assume their standard terms automatically apply. This is not necessarily the case. Unless those terms are properly incorporated into the agreement, they may be worthless when a dispute arises.

Contract Formation and Incorporation of Terms: Lessons from DAZN v Coupang

The recent Court of Appeal decision in DAZN Ltd v Coupang Corp illustrates this risk. A binding agreement for sublicensing FIFA Club World Cup broadcasting rights was found to exist, even though there was no signed contract or formal negotiation. Informal messages outlining key commercial terms were enough to create legal obligations on which Coupang Corp could rely. But what if DAZN had assumed its standard terms applied and therefore its standard protections? Without clear incorporation, those protections would not have been enforceable.

For businesses of all sizes, the lesson is clear: understanding how contracts are formed and how terms are incorporated is essential to managing legal risk.

One of the biggest mistakes businesses make which often give rise to such uncertainty are:

  • Contract Formation: Understanding how contracts are formed, identifying offer and acceptance, and clarifying the parties’ intentions.
  • Incorporation: Determining whether terms and conditions, including critical protections and limitations, have been validly included in the agreement.

Informal methods of negotiation may accelerate transactions, but they also introduce ambiguity. Key terms can be omitted, misunderstood, or poorly incorporated, and uncertainty around the parties’ intentions can lead to costly disputes. Simply having terms and conditions or relying on a “gentlemen’s agreement” is not enough. Businesses should take active steps to incorporate their terms into every agreement. Failure to do so can leave them exposed without limitation clauses, governing law provisions, or other essential protections.

Contract Formation: When is a deal legally a deal?

In the world of business and commerce, the line between negotiation and agreement is often thin. Contracts aren’t always formed through formal documents but even arrangements made by email, messaging platforms and verbal exchanges can carry legal weight.

The Five Elements of a Legally Binding Contract

A contract is legally formed when five elements are present:

  • Offer
  • Acceptance
  • Consideration
  • Intention to create legal relations
  • Certainty of terms.

Informal communications can satisfy these requirements, even if no one signs a formal agreement.

Why Informal Communications Can Satisfy These Requirements

The recent Court of Appeal decision in DAZN Ltd v Coupang Corp is a notable reminder that contracts can be formed in unconventional ways. DAZN Ltd, the exclusive licensee of broadcasting rights to the FIFA Club World Cup, discussed terms of a sublicence with Coupang Corp, a South Korean streaming platform. The parties exchanged emails and WhatsApp messages discussing key commercial terms but never signed a formal contract.

Despite this, the court found that a binding agreement had been formed because:

  • Offer and acceptance were evidenced in the exchange of key commercial terms such as price, territory and scope and confirmations of such terms.
  • Intention to be legally bound was inferred from the parties’ conduct, particularly the parties acknowledging the deal.

Crucially, the court considered the entire course of conduct; not just the messages exchanged, but how both parties behaved before and after. This case highlights that courts focus on substance over form. A message like “let’s proceed” or in this case descriptors such as “confirmed”, “secured” and “finalised” may be interpreted as acceptance. Additionally, one party begins performance, or records suggest a deal is done, legal intention may be inferred, even if the formalities weren’t complete.

For businesses, this creates risk. Informal exchanges can unintentionally lock you into binding commitments. Clarity, caution, and proper documentation remain essential; especially when commercial stakes are high.

Incorporation: Are the terms legally enforceable?

Consider the reverse scenario: a contract is formed (whether formally or informally) but the terms and conditions have not been properly incorporated. In such case, a party may be bound by the contract yet deprived of the protections it believed it could rely on.

Effective incorporation is essential. It is not sufficient to simply possess robust terms and conditions; they must be clearly and properly integrated into the contract to be enforceable.

Common methods of incorporation include:

  • By signature: The most secure method, where terms are expressly acknowledged and signed by the parties.
  • By notice: Terms are clearly referenced prior to or at the time of contracting.
  • By course of dealing: Where terms have been consistently used in prior transactions, they may be implied.

Issues could arise when:

  • Terms are not reasonably brought to the other parties’ attention; for example, in the case of Transformers and Rectifiers Ltd v Needs Ltd [2015], when the purchaser’s terms were printed on the reverse of a faxed order, but only the front page was sent.
  • Terms are not reasonably brought to the other party’s attention; for example, in Blu-Sky Solutions Ltd v Be Caring Ltd [2021], where an onerous cancellation clause buried within online terms accessed via a hyperlink was held not to be incorporated because it was not sufficiently highlighted.
  • Both parties are sending through a series of different or conflicting terms, and it is not clear at the conclusion of the negotiations which terms apply, also known as a battle of the forms.
  • Terms sent for signature have never been signed or formally accepted.
  • A sufficient course of dealing has not been met for terms to be implied between parties.

In informal contracting scenarios (such as DAZN Ltd v Coupang Corp) incorporation becomes particularly complex. In that case, the parties formed a binding agreement through email and WhatsApp exchanges and so where standard terms are not referenced in such communications, they may not form part of the agreement. This lack of incorporation could mean the parties are left without the protections and restrictions you would have hoped to have such as limitations on their liability, indemnities or obligations and warranties against the other party.

What should and shouldn’t you do when negotiating an agreement?

When negotiating your next agreement, consider the following to ensure you are protected:

You should:

  • Expressly refer to your terms in all communications: When negotiating by email or messaging platforms, include a clear statement that your standard terms apply and provide a link or attachment.
  • Obtain explicit acceptance: Ask the other party to confirm by signing the terms or providing a written statement that they agree to your terms before proceeding.
  • Use consistent documentation: Ensure that any purchase orders, confirmations, or invoices also reference your terms.
  • Stop and Think: If the other side present their terms, understanding the impact of these terms is imperative.
  • Check for conflicting terms: If the other party has their own terms, clarify which terms will govern the agreement before concluding the deal.
  • Keep evidence of incorporation: Retain copies of correspondence showing that your terms were sent and agreed.
  • Audit internal processes: Review how contracts are formed across departments. Confirm terms are consistently incorporated and informal communications are monitored.
  • Use digital tools carefully: Ensure e-signature platforms, websites and online systems support proper incorporation, hyperlinks alone may not suffice.

You should not:

  • Assume your terms apply automatically: They may not unless you make them part of the agreement even if you have made them available online.
  • Rely on informal agreements without reference to terms: Emails or WhatsApp messages can create binding contracts without your protections.
  • Leave incorporation until after the deal is done: Adding terms later may not be effective and can lead to further disputes.
  • Overlook updates: If your terms change, make sure the latest version is communicated and agreed before the contract is formed.
Practical Implications: Minimising Risk and Strengthening Contracting Practices

The overlap between informal contract formation and poor incorporation presents real legal risk. With clear processes and disciplined communication, businesses can protect themselves.

How Our Commercial Team Can Help

We advise on contract formation, enforceability, and risk management. Our services include:

  • Strategic guidance on contract procedures, including what to do when things go wrong
  • Drafting and reviewing contracts to ensure clarity and enforceability
  • Auditing standard terms and conditions for proper incorporation
  • Training teams to recognise and manage legal risks in informal communications

To protect your contracts and reduce risk, contact our team and we would be happy to help.

Get in touch today to discuss how we can help you and your business.

Cesare McArdle
Partner, Commercial & Construction
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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