A Saskatchewan judge has given the thumbs-up to the enforcement of a contract signed by emoji.
In the recent case of South West Terminal Ltd. v. Achter Land, a Swift Current farmer was ordered to pay an agricultural business more than $82,000 for failing to deliver 87 metric tonnes of flax after Court of King’s Bench Justice Timothy Keene concluded that his thumb-up response to a texted contract was enough to constitute valid signature and acceptance of the agreement.
The decision has caused quite a stir worldwide, as legal and more mainstream publications picked up on the unique case.
In my view, the ruling is welcome because it signals the court’s openness to digital developments in the outside world. Still, some media coverage deserves a thumbs-down for misleading readers about the decision’s potential impact.
To the general public, it could sound like they run the risk of entering a binding contract any time they send someone a thumbs-up response. But the truth is a little more nuanced, as the judge himself acknowledged in his introduction — pointing out that the key to his decision was what the use of the emoji meant “in the context of the specific facts of this law suit.”
The facts
According to the ruling, South West Terminal (SWT) and Achter’s business relationship dated back to 2012, long before they fell out over their differing interpretations of an emoji.
Since SWT’s chief grain buyer Kent Mickelborough joined the company in 2015, he told the court he had handled between 15 and 20 contracts with Achter, including four executed by text message as the onset of the COVID-19 pandemic forced him to stop meeting producers in person. The fifth of these texted contracts sparked litigation in March 2021.
After speaking with Achter principal Chris Achter, Mickleborough drafted a contract for Achter to sell SWT 87 metric tonnes of flax for $669.26 per tonne, with the date of delivery listed for “Nov.” Mickleborough signed the contract at his end, took a photo and texted it to Achter’s cell number, asking him to “Please confirm flax contract.” Achter responded with his now famous “thumbs-up” emoji.
November 2021 came and went without a delivery of flax from Achter — by which time, the crop was trading at more than twice the price agreed in the contract — prompting SWT to launch its claim for breach of contract and damages. Both the parties and the judge agreed that the dispute was “tailor-made” for summary judgment.
The results
After reviewing the previous contracts SWT and Achter had previously entered over text message, Justice Keene noted that they were all very similar to the one at issue — the only difference being the type of product and Achter’s choice to reply with a thumbs-up emoji, when previously he had typed out words like “ok”, “yup” or “looks good.”
While Achter denied any contract had been formed, claiming he had only used the emoji to confirm receipt of the contract, the judge disagreed:
“In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item — a meeting of the minds — just like they had done on numerous other occasions,” he concluded.
In addition, the judge rejected Achter’s contention that the use of the emoji fell short of enforceability under s.6 Saskatchewan’s Sale of Goods Act, which requires a “note or memorandum in writing and signed by the party.”
“This court readily acknowledges that a 👍 emoji is a non-traditional means to ‘sign’ a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a ‘signature’ – to identify the signator (Chris using his unique cell phone number) and as I have found above — to convey Achter’s acceptance of the flax contract,” Justice Keene wrote.
Finally, the judge ordered $82,000 in damages for non-delivery, based on the difference between the flax price in the contract ($669 per tonne) and the market price when Achter failed to deliver ($1614 per tonne).
The lessons
If this transaction were a one-off agreement between parties that were strangers to each other, the result would have been a shocking one. But these were relatively well-matched, sophisticated parties with a history of doing business on the strength of text messages. In the proper context, I think the judge was right to find that a thumbs-up emoji is just one more way to accept a contract.
For as long as there have been contracts, there have been parties trying to back out on the basis that they didn’t know they were signing a binding agreement. At its core, this case seems to have been a cutting-edge version of that old defence. Businesses should take an equally traditional set of lessons from the result: read every contract carefully, don’t respond too hastily, and if you have any questions or concerns, make them clear before accepting the terms or seek legal advice.