Benson Buffett eCase Note 2023 No. 04 August 7, 2023 / eCasenote

Thumbs up to using emojis as Contractual Assent: A Case Study from Saskatchewan

 In a groundbreaking decision, a Saskatchewan court has set a precedent that could reform the way contracts are accepted in the digital age in the case of South West Terminal Ltd. v. Achter Land, 2023 SKKB 116 (CanLII). This decision highlights the evolving nature of contract law in the face of advancing technology and the increasing prevalence of digital communication in business transactions. The court ruled that a simple thumbs-up emoji (👍) sent via text message was sufficient to bind a seller to a contract for the sale of 87 metric tonnes of flax.

The case involved a buyer and seller who had an established business relationship, often relying on text messages for their agreements, particularly during and after the COVID-19 pandemic. Their customary practice involved discussing the terms of their agreement over the phone, followed by the buyer preparing a paper contract. The buyer would sign the contract, send a digital photo of it to the seller via text, and include the message “Please confirm the terms.” The seller, in response, would typically reply with phrases like “Looks good,” “OK,” or “Yup.”

The previous business dealings between the parties had resulted in four valid contracts for the sale of durum wheat using this method. However, in the case at hand, the seller responded to the request for confirmation of a flax contract with a thumbs-up emoji instead of a written acknowledgment. When the seller failed to deliver the flax as agreed, the buyer alleged a breach of contract. The buyer, who had pre-existing contracts to resell the flax, was forced to enter the market at a higher price to fulfill these commitments, resulting in significant losses of approximately $82,000. Consequently, the buyer sued the seller for damages.

The seller argued that there was never a binding contract, asserting that the thumbs-up emoji merely indicated receipt of the contract, not acceptance of its terms. The seller claimed that he expected a paper copy of the contract to follow for his review before committing to the flax contract.

Court’s Decision and Implications

However, the court rejected the seller’s explanations and ruled in favor of the buyer. The court applied the objective test used to determine the existence of a contract, considering whether the parties had conveyed their intention to create a contract to the outside world, an objective reasonable bystander would have regarded the thumbs-up emoji as an acceptance of the flax contract. The court emphasized that the only difference in this case was the use of an emoji instead of a textual response like “Yup.”

Acknowledging the non-traditional nature of using an emoji to signify contract acceptance, the court highlighted that modern electronic contract law recognizes various unconventional but legally valid means of acceptance, such as electronic signatures or clicking an icon on a computer screen. In this instance, an emoji was deemed no different. The court acknowledged the novelty of the case but emphasized the need for courts to adapt to the changing technological landscape and common usage. Consequently, the court granted summary judgment in favor of the buyer, awarding damages amounting to $82,000. This decision marks a significant milestone in contract law, recognizing the use of emojis as a valid means of conveying acceptance and underscores the need for legal systems to keep pace with evolving technology.

As the prevalence of digital communication continues to grow in the business world, this decision highlights the importance of clear and unambiguous communication in contract negotiations, whether conducted through traditional or digital means.

The ruling paves the way for further discussions and potential challenges surrounding the use of 👍 and other unconventional forms of communication in legal contexts. It exemplifies the need for ongoing examination and adaptation of legal frameworks to accommodate the ever-changing landscape of technology and communication.

While this case may have been novel in the province of Saskatchewan, its implications are likely to resonate beyond its borders, serving as a catalyst for discussions in other jurisdictions facing similar challenges. The decision acts as a reminder to legal professionals and society at large that the law must adapt to reflect the realities of the modern world, where emojis have become an integral part of our daily communication. 🤨