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Canadian court recognises ‘thumbs-up’ emoji as valid acceptance of contract

21 Jul 2023

| Author: Vivian Mitchell

Contract formation – whether emoji constitutes acceptance of contract – objective theory of contract – statutory interpretation – non-traditional means of signing – electronic signature – Saskatchewan Sale of Goods Act

South West Terminal v Achter Land & Cattle 2023 SKKB 116 per Keene J.

 

In South West Terminal v Achter Land & Cattle, the King’s Bench for Saskatchewan ruled a “thumbs-up” emoji sent via text constituted a valid form of acceptance of a contract.

The plaintiff, South West Terminal (SWT), and the defendant, Achter Land & Cattle (Achter), had a long-standing business relationship from 2012 onwards. SWT claimed it entered into a deferred delivery purchase contract with Achter for the sale of flax. SWT’s representative texted a picture of the contract to Achter’s owner, accompanied by a message stating, “Please confirm flax contract”. Achter responded with a “thumbs-up” emoji.

Achter did not deliver the flax. Subsequently, the price of flax significantly increased from C$17 to C$41 per bushel. SWT sued for breach of contract and claimed damages.

A critical aspect of the court’s analysis was its interpretation of the “thumbs-up” emoji. SWT argued the emoji signified Achter’s acceptance of the contractual terms, while Achter contended it was nothing more than acknowledgement of the text and receipt of the offer. Achter explained it would not have entered a contract like this without reviewing all the terms and without including a force majeure provision.

The court applied the objective theory of contract formation, asking whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract.

The court examined the context and previous dealings between the parties, focusing on their established business relationship and Achter’s previous use of similar responses, such as “ok”, “yup”, or “looks good”, to indicate acceptance of contracts sent via text message. The court distinguished the “thumbs-up” emoji case of Can-Am Farms Ltd v Parkland Pulse Grain C. Ltd, 2004 SKQB 58, because there was no consensus as idem (agreement) in that case.

The court acknowledged the emoji was a “non-traditional” means of signing a document but it fulfilled the purposes of a signature, under the state’s Sale of Goods Act, to identify the signatory and to convey Achter’s acceptance of the contract.

Applicable principles: Objective theory of contract formation – context and circumstances of the business relationship – contract enforceable by action – electronic signature requirements – floodgates argument

Held: In the specific circumstances of the case, the “thumbs-up” emoji constituted a valid acceptance of the contract.

The court relied on the parties’ previous dealings involving text messages to confirm contracts and concluded that a reasonable objective bystander aware of this history would interpret the emoji as an indication of agreement.

The court dismissed floodgate arguments and others around potential challenges in interpreting other emojis such as the “shaking-hands” emoji. It said society and the courts should be prepared to meet the new challenges that may arise from the use of emojis and the like. It granted summary judgment in favour of SWT and Achter was ordered to pay more than C$82,000 in damages.

 

Vivian Mitchell is an LLB/BA graduate.

South West Terminal v Achter Land and Cattle 2023 SKKB 116

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