King's Bench for Saskatchewan, Canada: An interesting matter involving the laws of contract cropped up before a Canadian Court, wherein they had to determine and interpret the context in which the “Thumbs-Up” 👍 emoji was used in a contract between the parties; that is whether the “thumbs-up” emoji constituted a signature for the purposes of acceptance.
Based on the peculiar facts of the instant case, T.J. Keene, J.*, readily acknowledged 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”- that is, to identify the signatory and to convey acceptance of the flax contract. The Court further found that the flax contract in dispute has met the provisions of Sales of Goods Act, RSS 1978.
The Court was also of the view that signature in a classic presentation does denote identity and confirmation of an agreement; however, that in itself does not prevent the use of a modern- day emoji such as a 👍.
Background: The plaintiff South West Terminal (SWT) and defendant Achter Land & Cattle Ltd. (Achter) had a long-standing business relationship. SWT claimed the parties entered into a deferred delivery purchase contract (flax contract) on 26-03-2021 in which SWT agreed to buy and Achter agreed to deliver 87 metric tonnes of flax for a contracted price with delivery between 01-11-2021 and November 30, 2021.
For contractual purposes, Chris Achter was the representative for Achter while SWT was being represented by Kent Mickleborough.
However, SWT stated that Kent after communicating with Chris, had a contract drafted. Kent applied his ink signature to the contract, then took a photo of the contract using his cell phone and texted the photo of the contract to Chris Achter on cell phone number, along with the text message: “Please confirm flax contract”. Chris Achter texted back from his cell number a “thumbs-up” emoji.
This is where things get interesting! Achter did not deliver the alleged agreed amount of flax to SWT and disputed the validity of the alleged contract.
Court's Assessment and Findings: The Court stated that the instant case is peculiar given the way the alleged acceptance was conveyed. Hence the Court had to determine whether there existed a valid contract between SWT and Achter.
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Consensus ad idem– Meeting of minds is basis of any contractual obligation. The Court noted that the test for agreement to a contract for legal purposes is 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 pointed out that Chris who is the acting mind of Achter had a long -standing business relationship with SWT going back to at least 2015. Taking note of the past communications between Kent and Chris, the Court pointed out that there is an uncontested pattern of entering into what both parties knew and accepted to be valid and binding deferred delivery purchase contracts on a number of occasions.
The Court further noted that each time Kent added to the offered contract “Please confirm terms of durum contract” and Chris did so by succinctly texting “looks good”, “ok” or “yup”. The parties clearly understood these curt words were meant to be confirmation of the contract and not a mere acknowledgement of the receipt of the contract by Chris. “There can be no other logical or creditable explanation because the proof is in the pudding. Chris delivered the grain as contracted and got paid. There was no evidence he was merely confirming the receipt of a contract and was left just wondering about a contract”.
Perusing the alleged contract and the connected communications between Kent and Chris, the Court was of the view that Kent's use of the phrase “Please confirm flax contract” (the only difference being the use of the word flax instead of the word durum) and Chris' use of 👍 instead of words like “ok”, or “looks good”; is very similar to the afore-stated durum contracts communication that was referred by the Court.
Perusing the cross-examination of Chris, the Court noted that Chris took the position that he was generally unaware of what thumbs-up emoji meant and what it conveyed to Kent. However, the Court stated that “it is not what Chris may or may not think a 👍 emoji means. It is what the informed objective bystander would understand”.
Delving into the meaning of emojis, the Court stated that dictionary meaning of 👍 emoji is that it is used to express assent, approval or encouragement in digital communications, especially in western cultures.
Perusing, Chris' affidavit, the Court opined that, “There was a confirmation of the receipt of the contract (seemingly denoting a form of acknowledgement) which I took to mean that Chris understood a 👍 emoji means something affirmative. This ends up being a bit of a cake and eat it too situation — Chris wants the court to accept the emoji meant only he got the contract but not that he approved the contract”.
Taking note of the conversations between Kent and Chris vis-à-vis the alleged contract and their afore-stated past conversations, the Court stated that the circumstances support Kent's recollection of the events.
The Court was of the view that on balance of probabilities, Chris okayed or approved the contract just like he had done before except this time he used a 👍 emoji. Therefore, considering all of the circumstances, that meant approval of the flax contract and not simply that he had received the contract and was going to think about it.
Court was of the view that 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.
Under the circumstances of the instant case, the Court also found that a 👍 emoji is “an action in electronic form” that can be used to allow to express acceptance as contemplated under The Electronic Information and Documents Act, 2000, SS 2000, c E-7.22 (EIDA).
Concerns were raised by Achter's counsel that allowing thumbs-up emoji as valid means of contractual acceptance may open floodgates seeking interpretation of all sorts of emojis. Taking note of the concern, the Court observed that the instant case is indeed novel but nevertheless the Court cannot attempt to stem the tide of technology and common usage — “This appears to be the new reality in Canadian society and courts will have to be ready to meet the new challenges that may arise from the use of emojis and the like”.
Referring to the precedents, the Court found that there is case authority for the use of email and the use of electronic non-wet ink signatures to identify the person signing and to establish the person's approval of the document's contents.
The Court also stated that even if the general terms and conditions are not part of the flax contract — the essential terms of the flax contract are contained in the first page of the contract that was texted to Chris and to which he confirmed. The agreement did convey with sufficient clarity the essential terms in agreement being the parties (SWT and Achter), the property (flax) and the price. The Court was of the view that there were no missing or unascertainable essential terms in the flax contract — the parties, property and price were crystal clear.
Decision: Thus. the Court held that the alleged flax contract between SWT and Achter was a valid contract and Achter breached the contract by failing to deliver the flax. The Court further determined damages in the amount of $82,200.21 payable to SWT.
[South West Terminal (SWT) v. defendant Achter Land & Cattle Ltd., 2023 SKKB 116, decided on 08-06-2023]
*Judgement was delivered by Justice T.J. Keene
Appearing
Michael Marschal for the plaintiff
Jean-Pierre Jordaan for the defendant
