Author: Alison Colpitts

Earlier this summer, a decision out of Saskatchewan made international headlines when a judge ruled that a flax supplier sending a thumb’s up emoji by text implied agreement to a supply contract. The supplier had argued that he only confirmed receipt of the document, but the judge didn’t accept that argument, so the supplier had to pay over $82,000.

What do BC business owners need to know about this case? The judgment highlights that courts are prepared to adapt to the times and will be open to new or unique arguments on how parties make a contract. If you’re a business owner, you should be aware of these legal developments, as they should affect how you run your business.

First, as a recap, a contract needs the following to be enforceable:

• an offer by one party;
• an acceptance by another party;
• both parties’ intent that the agreement would be a legal one, i.e. enforceable at law; and
• consideration, usually in the form of some exchange of benefits between the parties (for example, one party receives money while the other party receives a service or a good).

For a contract to exist, there needs to be a “meeting of the minds”, which is when the parties understand and agree on the contract’s essential terms.

Businesses will typically authorize certain representatives who can bind the company—that is, to enter into contracts on behalf of the company. Anyone with the authority to enter into contracts on behalf of your business should be aware that perhaps the most innocent of communications—sending an emoji, for example—could meet the criteria above.

Your team should be mindful that using unambiguous language is the best practice when entering into a contract to avoid miscommunication and the risk of litigation down the road.

When talking to your team about contract processes and procedures, we recommend the following:

1. Clarify who on your team can enter into contracts on behalf of your business.
2. Consider whether certain contracts (perhaps over a certain dollar amount or for a specific product or service) should need approval from more than one person.
3. Consider setting up some procedures for entering into new contracts (e.g. using document signing software and saving all executed agreements in a central location).
4. Review existing contracts to understand and be aware of all terms and conditions.

Download the printable and shareable design of these easy steps below, perfect for sharing with colleagues in the office or working elsewhere.

If you have any questions about a contract your business is relying on or considering entering into, or if you need help with creating a contracts policy for your company, please reach out to any member of our Business Litigation team and we will be happy to help.