In a significant decision handed down on 26 February 2026, the Court of Appeal in Chia Seong Pow v. Alexma Corporation Sdn Bhd [2026] 5 CLJ 185 reaffirmed that a contract does not need to be formally signed to be enforceable under Malaysian law.
The Court held that where the parties have reached consensus ad idem on the three essential elements — the identities of the parties, the description of the property, and the agreed purchase price — a binding contract is concluded. The subsequent execution of a formal document serves merely to formalise what has already been agreed.
On the facts, the Court found that a WhatsApp message from the vendor’s solicitors stating “Ok proceed”, together with a follow-up confirmatory email acknowledging the reduced purchase price of RM4,102,341.00, was sufficient to establish a concluded agreement. The unsigned third draft sale and purchase agreement was accordingly enforceable, and the defendant’s failure to proceed rendered it liable in damages.
This decision is a timely reminder that informal communications — including WhatsApp messages and emails — can have binding legal consequences. Parties entering into negotiations over property or commercial transactions should exercise caution before sending any message that confirms agreement on key terms.
For advice on contract disputes or property transactions, contact J. Lee & Co.
