Authors: Adrienne Adams and Hannah Plant
In the recent decision, South West Terminal Ltd. v Achter Land, 2023 SKKB 116, a Saskatchewan Judge found the 👍 emoji met the requirements of a signature and confirmed the existence of a contract for the sale of goods. The decision highlights a change in the legal contract landscape as Canadian courts adapt to the “new reality” of Canadian society and the use of emojis as a form of communication. For Canadian business owners, especially those with a history of less-than-formal communications, the decision underscores the need to ensure that businesses are only entering into contracts when they want to.
The facts of the case were not a point of contention. The plaintiff and buyer, Kent Mickleborough (the “Plaintiff”), spoke with the defendant and supplier, flax farmer Chris Achter (the “Defendant”), over the phone regarding the purchase and deliver of a flax shipment. After the conversation, the Plaintiff sent a picture to the defendant by text of the signed contract for purchase and delivery in November of the flax (the “Flax Contract”). The text included a message asking the farmer to “please confirm flax contract”. The Defendant responded with a “thumbs-up” emoji.
However, come November, the delivery of flax, pursuant to the Flax Contract, was not fulfilled. The Plaintiff sought summary judgment in Saskatchewan against the Defendant in relation to the Flax Contract. The genuine issue of the case was whether there was a meeting of the minds, which is the legal foundation to form a contractual obligation.
Positions of the Parties
The Defendant contended that a contractual obligation was not formed as the “thumbs-up” emoji simply signaled that he had received the Flax Contract. The Defendant argued the “thumbs-up” emoji did not confirm that he was agreeing to the terms of the contract, and he specifically relied on the statutory defence of s. 6(1) of The Sale of Goods Act, RSS 1978, c S-1 (the “SGA”). At the time of sending the “thumbs-up” emoji , the Defendant submitted that he believed the actual contract would follow by either fax or email to be reviewed and signed at a later date.
The Plaintiff argued that because he followed up the text with the picture of the Flax Contract with a message asking the Defendant to “confirm” the Flax Contract, when the Defendant responded with a “thumbs-up” emoji, it was the Defendant’s way of agreeing to enter into the Flax Contract. The Plaintiff claimed the “thumbs-up” emoji represented the Defendant’s signature.
Analysis of the Court
In their analysis, the Justice Timothy Keene considered the relationship between the parties as evidence demonstrated that the parties had a history of entering into contracts relatively casually. The Plaintiff would signed delivery contracts, send pictures to the Defendant, and the Defendant would reply with a simple “looks good”, “ok”, or “yup”.
Justice Keene not only looked at the circumstances of the parties’ relationship, but also looked to other sources to ensure the meaning of the “thumbs-up” emoji was consistent with everyday use. An online dictionary defined the emoji as being “used to express assent, approval or encouragement in digital communications, especially in western cultures”. The Court accepted that the definition seemed to be consistent with what a reasonable person would interpret a “thumbs-up” emoji to mean. The Court stated that due to the definition and general understanding of the emoji coupled with the established relationship between the parties, it was appropriate for the Plaintiff to assume a contract had been formed.
The Judge also considered the provisions of the SGA which provide that a contract for the sale of goods will not be enforceable “unless some note or memorandum in writing of the contract is made and signed by the party to be charged”. The definitions for “signed” and “in writing” are not interpreted in the SGA in their strict sense. Justice Keene held that the Flax Contract was in fact “in writing” and “signed” by both parties and therefore in compliance with the SGA.
Justice Keene ruled that the Defendant signed the contract, similar to his past acceptance of contracts, except this time using a “thumbs-up” emoji. By considering all the contextual circumstances of the parties and their relationship, a reasonable bystander would agree that this was a meeting of the minds and a contractual relationship was formed when the Defendant sent a 👍 emoji. As such, Justice Keene found the Defendant breached the Flax Contract by failing to deliver the flax and ordered the Defendant to pay damages of $82,000.
The Consequences of Digital Communication
In the decision, Justice Keene emphasized that the “court cannot (nor should it) attempt to stem the tide of technology and common usage”. With the increase in informal digital communications between suppliers and buyers, business owners must recognize the potential consequences of their emails, texts and any other mediums they regularly use to conduct their business.
If you require assistance with your contract matter, please contact Adrienne Adams or another member of Clark Wilson’s Private Company Mergers and Acquisitions group. We provide guidance to privately owned businesses of all sizes across a variety of industries and can assist with the preparation and review of a diverse range of contracts and agreements.