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Back Home 5 News 5 Canadian judge accepts thumbs-up emoji as binding in contract dispute

Canadian judge accepts thumbs-up emoji as binding in contract dispute

21 Jul 2023

| Author: Reweti Kohere

Is a “thumbs-up” emoji sent in a text message enough to form a legally binding contract? Yes, according to a decision by Justice Timothy Keene in the Court of King’s Bench for Saskatchewan, Canada, in a contract dispute between South West Terminal Ltd (SWT) and Achter Land & Cattle Ltd (ALC).

Justice Keene said while he accepted the case was novel, at least in Saskatchewan, the court “cannot (nor should it) attempt to stem the tide of technology and common usage. “This appears to be the new reality in Canadian society and courts will have to be ready to meet the new challenges that may arise from the use of emojis and the like,” he said. At issue was a photo of a contract that grain and crop company SWT texted to ALC, as it had done several times in the past. SWT received the thumbs-up emoji in response and believed the pair had entered into a binding agreement to deliver 87 tonnes of flax.

 

The deal

For nearly a decade, SWT, a farmer-owned, independent grain and crop inputs company, bought grain from farming corporation ALC.

A couple of years into the parties’ business relationship, Kent Mickleborough started at SWT as a grain buyer. When negotiating contracts with ALC, Mickleborough would deal mainly with the seller’s principal, Chris Achter. The pair would agree on a price and volume of grain, then Achter would ask the grain buyer to write up a contract and send it to him for approval.

Even before the covid-19 pandemic forced him to stop meeting producers in person, Mickleborough would typically draw up contracts by email and text message. Before this particular dispute, he had already completed a few contracts with ALC by having Achter execute them by text message from his cell phone number.

The grain buyer would write up the terms of the contract, sign it, then take a photo of it from his cell phone, and send it to Achter with the message, “Please confirm terms”. On three previous occasions, Achter had replied “Looks good”, “Ok”, and “Yup”. The grain buyer understood Achter’s responses to mean he had agreed to the contract.

However, their consistent meeting of the minds was seemingly absent on 26 March 2021. SWT agreed to buy 87 metric tonnes of flax from ALC for C$669.26 (NZ$747.36) a tonne, with delivery occurring later in November. Mickleborough followed his usual process of drawing up the contract and sending it via text. Asked to “please confirm flax contract”, Achter replied from his cell phone with a “thumbs-up” emoji.

Eight months later, Achter did not deliver any flax. The flax spot price at the end of November 2021 was nearly 2.5 times the contracted sale price. SWT sued for breach of contract, seeking just over C$82,000 (NZ$94,629) in damages, plus interest and costs. Achter denied it had entered into the contract. “What sets this case apart is the use of a thumbs-up emoji ‘👍’ and what that meant in the context of the specific facts of this law suit,” Justice Keene said.

 

Proof is in the pudding

Dealing with SWT’s application for summary judgment, Justice Keene noted the parties agreed the case was “tailor-made” for an expedited decision, without the need and expense of a trial. However, they disagreed on whether there was a meeting of the minds.

The formation of contracts in Canada is judged objectively, the judge explained. When considering how each party’s conduct would appear to a reasonable bystander, Canadian courts aren’t restricted to the “four corners of the purported agreement”. They can consider the surrounding circumstances as well as the nature and relationship of the parties and the interests at stake.

The judge found the parties had an “uncontested pattern” of entering into – what the pair knew and accepted to be – valid and binding contracts. Each time Mickleborough asked for Achter’s confirmation of the offered contract, ALC’s principal replied with “curt words” that both parties understood as meaning confirmation of the deal, and not a mere acknowledgement that Achter had received the contract.

“There can be no other logical or creditable explanation because the proof is in the pudding. Chris delivered the grain as contracted and got paid. There was no evidence he was merely confirming the receipt of a contract and was left just wondering about a contract,” Justice Keene said.

 

Assent, approve, encourage

While Mickleborough understood Achter’s thumbs-up emoji to signify his agreement, ALC’s principal took a different view. “I confirm that the thumbs-up emoji simply confirmed that I received the flax contract. It was not a confirmation that I agreed with the terms of the flax contract,” said Achter, who understood a complete contract would follow by fax or email for his review and signature.

Because of the disagreement, the parties were led to a “far flung search for the equivalent of the Rosetta Stone” in cases from other jurisdictions to unearth what a 👍 emoji meant, said the judge, a self-described latecomer to the world of technology. Based on his everyday use of the emoji, and his understanding of it, Justice Keene found alignment with Dictionary.com’s definition of the emoji being “used to express assent, approval or encouragement in digital communications, especially in Western cultures”.

Achter’s interpretation also possessed “a bit of a cake and eat it too” flavour, the judge said. Appearing somewhat “carefully crafted”, the affidavit evidence from ALC’s principal would have the court “accept the 👍 emoji meant only he got the contract but not that he approved the contract. This is of course somewhat self-serving.

“I am satisfied on the balance of probabilities that Chris okayed or approved the contract just like he had done before except this time he used a 👍 emoji,” Justice Keene said. “In my opinion…a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions.”

 

Tide of technology

The judge also found the emoji was valid for the purposes of s 18 of Saskatchewan’s Electronic Information and Documents Act 2000, which permits electronic forms, such as clicking on an icon on a computer screen, to express an offer, acceptance, or any other matter material to forming a contract. Achter’s argument – that an actual signature, which would’ve confirmed his identity and conveyed his acceptance of the contract, was essential – didn’t persuade the court. “I agree a signature in the classic presentation does denote identity and confirmation of an agreement…However, that in itself does not prevent the use of a modern day emoji such as a 👍,” Justice Keene said.

Achter also defended the claim on the basis the emoji didn’t constitute a signature under the state’s Sale of Goods Act 1978. To enforce a contract for the sale of goods exceeding C$50 (NZ$60), s 6 of the Act requires the party to be charged to make and sign some note or memorandum in writing of the contract. The judge found the flax contract was “in writing” and “signed” by both parties. But did Achter’s thumbs-up emoji constitute a “signature”?

“This court readily acknowledges that a 👍 emoji is a nontraditional means to ‘sign’ a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a ‘signature’ – to identify the signator (Chris using his unique cell phone number) and, as I have found above, to convey Achter’s acceptance of the flax contract,” Justice Keene held. “I therefore find that under these circumstances that the provisions of s 6 of the SGA have been met and the flax contract is therefore enforceable. There is no issue in this regard that requires a trial.”

The court awarded SWT $82,200.21, the difference between the contract price for the 87 tonnes of flax was C$944.83 a tonne and the market price in November 2021, when delivery should have been made. ■

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