A recent Saskatchewan decision sets an interesting precedent around how contracts can be accepted: The court ruled that a thumbs-up emoji (👍), sent from seller to buyer by text, was sufficient to commit the seller to a contract for the sale of 87 metric tonnes of flax.
The buyer and seller had a longstanding business relationship. They had done business by text before, especially during/after the COVID-19 pandemic. Their habit was to discuss the terms of their agreement by phone, and then have the buyer prepare a paper copy of the contract. The buyer would then sign it, and send a digital photo to the seller by text, with the words “Please confirm the terms”. In response, the seller would communicate his acceptance by texting back words like “Looks good”, “OK”, or “Yup”.
They had previously concluded four valid contracts for the sale of durum wheat (rather than flax) this way.
In this case, the only real difference was that in response to the line “Please confirm flax contract”, the seller texted back a thumbs-up emoji, instead of a word like “OK”. But when the seller failed to deliver the flax on the agreed date, the buyer complained that their contract had been breached. Since the buyer had pre-existing contracts to re-sell the flax to others, he had to re-enter the market at a higher price, to buy flax to satisfy these other commitments. He incurred losses of about $82,000, and sued the seller for this amount.
The seller objected that there had never been a binding contract at all. He insisted the thumbs-up emoji he texted was simply to confirm he received the contract – not that he accepted its terms. He claimed to have expected a paper copy to follow by fax or email for his review, and said he would never have agreed to the flax contract without first reviewing its terms and conditions in full.
The court rejected these explanations, and found in the buyer’s favour.
In law, the test for whether a contract exists looks at whether the parties have indicated to the outside world (in the form of what’s called the “objective reasonable bystander”) that they intended to create a contract. In assessing this, the court can look at the surrounding circumstances and the nature of the parties’ relationship.
Here, an objective reasonable bystander would have considered the thumbs-up emoji to be an acceptance of the flax contract, particularly in view of the parties’ approach to the durum wheat contracts in the past. The only difference was the seller’s use of an emoji instead of the words “Yup” or similar. As the court explained:
I am satisfied on the balance of probabilities that [the seller] okayed or approved the contract just like he had done before except this time he used a 👍 emoji. In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view 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.
On the novel use of the emoji to signify acceptance of a contract’s terms, the court added:
This court readily acknowledges that a 👍 emoji is a non-traditional 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 (with a unique cell phone number) and . . . to convey [the seller’s] acceptance of the flax contract.
Moreover, this aligns with the modern law pertaining specifically to electronic contracts, where contract acceptance can be signified in some unconventional – but fully legal ways. For example it can given by using an electronic signature, or even by clicking an icon on a designated spot on the computer screen. In these circumstances, an emoji was no different. The court added:
I agree that this case is novel (at least in Saskatchewan) but nevertheless this 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.
The court granted summary judgment in the buyer’s favour, and awarded $82,000 in damages.
Full text of the decision: South West Terminal Ltd. v. Achter Land, 2023 SKKB 116 (CanLII)
