Sometimes. A Saskatchewan court explains when.
By: Anna Katyk*
In South West Terminal Ltd. v Achter Land, 2023 SKKB 116 (“South West”), the judge decided that a thumbs-up emoji sent in a text message could mean agreeing to a contract. This happened in a dispute between South West Terminal Ltd. (the “buyer/ South West”) and Achter Land (the “seller/ Achter”), who had done business together for a while, usually contracting in person, through email or by text.
Specifically, the court interpreted the seller’s thumbs-up emoji as accepting the buyer’s offer, despite the seller believing it was merely acknowledging receiving the offer. The court agreed with the buyer, South West, that the emoji meant acceptance and a contract was formed.
This case is instructive for those who use text messaging and other convenient means of communication to do business. It’s a warning that courts can take seriously those who communicate using emojis or short texts.
There were multiple issues before the court, two of which are discussed in this case comment: did the parties intend to form a contract, and was the contract in writing and signed by both parties even though the acceptance was an emoji.
South West and Achter had a longstanding business relationship. They previously contracted approximately 20 times, usually in person but sometimes through email or text messages.
The pandemic swooped in, and the parties stopped meeting in person and began contracting exclusively through email and text.
Four of the contracts between the parties before the disputed contract were concluded through text message, each time with Achter responding from the same cell phone number. This was important.
The first contract concluded through text was when the parties discussed terms by phone, and then South West drafted a paper contract, signed it, took a picture of it, and texted it to Achter with a message that read, “Please confirm terms of durum contract.” Achter texted back, “Looks good”. Achter performed the contract, delivering durum wheat to South West.
The parties concluded three more contracts through text with very similar circumstances. In all three instances, the parties spoke on the phone, South West drafted a contract, signed it and texted a picture to Achter, asking Achter to “please confirm terms of durum contract.” Achter texted back, “Ok”, “Yup,” and “Ok”, respectively. Achter performed all three contracts by delivering durum wheat to South West and never contested these contracts.
The dispute arose from the fifth time the parties texted about a contract.
This time, the parties discussed a flax contract by phone, after which South West drafted the contract, signed it and texted a picture of it to Achter with the message “Please confirm flax contract”. Achter texted back a thumbs-up emoji.
But this time, Achter did not deliver.
Achter took the position that no contract was formed because the thumbs-up was not an acceptance but a mere acknowledgement of receiving South West’s offer.
Achter differentiated between this instance and the previous contracts by pointing to the fact that the grain had not yet been produced, and when dealing with not-yet-produced grain, Achter wouldn’t sign contracts without an Act of God clause. It was unclear from the picture of the contract whether South West included such a clause, and thus Achter was expecting a complete copy of the contract from South West by email or fax before accepting. Achter also argued that because an Act of God clause was essential, the parties had not agreed on all essential terms and could not have formed a contract.
Having regard to the thumbs-up emoji’s common usage, the court deemed the thumbs-up emoji an acceptance. This was because an objective reasonable bystander with all the facts would have concluded that Achter’s emoji was not an acknowledgement of receipt but an acceptance of South West’s offer, much like the previous responses of “Looks good,” “Yup” and “Ok”.
With respect to the certainty of terms, the court was satisfied that the part of the contract South West showed Achter disclosed the substance of the parties’ agreement. The court found that because Achter never informed South West that it would not accept an offer without an Act of God clause, South West was not expected to know this, and the Act of God clause couldn’t have been an essential term without which the contract couldn’t be formed.
A contract was, thus, formed through an emoji.
What does this case tell us?
It revisits some of the longstanding common-law principles. Courts are not restricted to the four corners of the contract and may consider surrounding circumstances, also known as the factual matrix, to determine whether parties intended to form the contract.
A long standing business relationship forms part of the factual matrix.
If a term is essential, this best be communicated to the other party; otherwise, there is a risk the court may not deem it an essential term of the contract.
While Achter’s four previous text message acceptances were curt, they were not emojis. This did not, however, stop the court from finding Achter’s intention to be bound by the thumbs-up emoji it sent to South West in response to the picture of the flax contract.
Will a thumbs-up emoji necessarily form a contract? No, it won’t. Not without a set of circumstances that would lead an objective reasonable bystander to conclude that the thumbs-up emoji is an acceptance. Will it form a contract with enough of the factual matrix lining up to support formation? Maybe.
And it’s not just an emoji that could have led to this outcome. This dispute could have arisen with an “okay”, “alright”, “sounds good”, “great, thanks,” alike. All are equally vague when taken in the abstract, but all are sufficient for acceptance under the right factual matrix.
What’s more, the court deemed the emoji to satisfy not only the in-writing requirement but also the signature requirement. It came from Achter’s phone number and was as good as a signature because it was enough to identify Achter.
Ontario’s Sale of Goods Act (SGA) does not have the same in-writing and signature requirements as the Saskatchewan Sale of Goods Act. In fact, Ontario’s SGA expressly permits oral contracts.
What Ontario does have is the Statute of Frauds. While it only applies to certain contracts, like contracts for the sale of real property, it requires that these contracts be in writing and signed by both parties. The Electronic Commerce Act clarifies that the in-writing and signature requirements are met through email but does not expressly address text messages. Applying the same analysis to a sale of real property, two parties could conclude an agreement of purchase and sale through text message. Perhaps even through an emoji, although the author would caution against it.
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* Anna Katyk practices commercial litigation and arbitration with a focus on sales law. She can be reached at [email protected].
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