Can an emoji lead to a contractually binding agreement?
We probably use at least one type of emoji and a popular one must be the thumbs up. But how legally binding is it if you reply with that emoji?
The decision in a recent Canadian case (South West Terminal Ltd v Achter Land & Cattle Ltd (June 2023)) has given some very useful guidance and you might be surprised with the result. In that case, the Judge ruled that where contractual negotiations historically took place via text messages and where relaxed communication styles, such as emojis were used, a thumbs up emoji was deemed to have been a valid signature. In other words, the terms of business sent in the text message were accepted by the party sending the thumbs up. The Judge pointed out that courts need to adapt to the “new reality” of how people communicate in today’s world.
Kent Mickleborough of South West Terminal Ltd claimed that he on behalf of the company had entered into a contract with Achter Land & Cattle Ltd to buy 86 tonnes of flax which was never delivered. Kent texted a picture of the contract to deliver the flax asking the owner of the farm, Chris Achter to “please confirm flax contract”, to which Achter responded with a thumbs-up emoji. The parties disputed the meaning of the thumbs up emoji: South West Terminal Ltd relied upon the argument that the emoji meant that Achter Land & Cattle Ltd was agreeing to the terms of the contract; whereas Achter Land & Cattle Ltd said that the emoji simply indicated that Chris Achter had received the contract to consider.
The decision reached by the court was not based upon this one isolated contractual negotiation but a history of business dealings. It took into account that South West Terminal Ltd had provided evidence of the relaxed manner in which the two companies historically entered into contractual agreements which were fulfilled and met and this included the use of emojis and language such as “yup” and “okay”.
Justice Timothy Keene consulted the website, dictionary.com emoji dictionary, which defined the use of the thumbs ups emoji to express assent, approval, or encouragement in digital communications. Whilst it was accepted by the Judge that using an emoji was not a traditional method of signing a contract, it was held to be a valid contract in this case and it was stressed that the court “cannot (nor should it) attempt to stem the tide of technology and the common usage” of emojis.
It is becoming ever more important that businesses think carefully about how they will avoid falling into the same position as Achter Land & Cattle Ltd in this case. Firstly consider having a protocol for who is responsible for negotiating contracts and then train those staff on how to communicate with clients and customers effectively and ensure that they are aware of the risks and potential pitfalls of not using formal English language and communicating via other electronic forms, namely text message or What’s app. If you get it wrong, it could be an expensive thumbs up!