Thumbs Up Emoji - a new precedent for contract acceptance

A Canadian judge has ordered a farmer to pay CAD$82,000 (AUD$92,000) after ruling that a "thumbs up” emoji used in a text message exchange was as valid as a signature, and ultimately the acceptance of the contract. This ruling sets a unique precedent in the interpretation and application of emojis (and other forms of digital communication) during contract formation and acceptance.

In this instance, the “thumbs up” emoji was sufficient for Justice T. J. Keene to determine that, considering all the circumstances and on the balance of probabilities, the emoji represented an understanding that the parties had reached consensus ad idem – a meeting of the minds, just as they had on previous occasions.

Background

The case South West Terminal Ltd v Achter Land & Cattle [2023] SKKB 116 involved Kent Mickleborough, a grain buyer for a crop inputs company called South West Terminal (SWT), who took Achter Land and Cattle, a long-term client and farming corporation, to court for breaching a contract. In March 2021, Mickleborough sent a mass text message to his suppliers, including Chris Achter, seeking to purchase flax for delivery later that year.

Following the text message, Mickleborough had a phone call with Achter, which the judge later determined included a verbal agreement. Mickleborough then drafted a contract for Achter to sell SWT 86 metric tonnes of flax at a specified price and delivery period. Mickleborough signed the contract, took a photo, and sent it to Achter along with the message "Please confirm flax contract." Achter responded with a "thumbs up" emoji.

However, Achter never delivered the flax in November, resulting in a significant increase in the price of flax by the time of the due delivery. SWT claimed breach of contract and sought damages of $82,200.

Achter argued that the “thumbs up” emoji only confirmed the receipt of the Flax contract, and it did not imply agreement with the contract's terms. According to Achter, the complete contract was not sent, and they expected it to follow by fax or email for their review and signature.

When assessing whether the “Thumbs Up” established a meeting of the minds, the judge considered the previous dealings between the parties. An uncontested pattern of entering into what both parties knew and accepted to be a valid and binding deferred delivery purchase of flax was established.

The judge concluded that "This court readily acknowledges that a thumbs up 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'."

As a result, the court granted SWT's application for summary judgment and entered a judgment against Achter for damages in the amount of $82,200.21 payable to SWT.

Application in Australian courts

The "doctrine of precedent" is the rule that a legal principle established by a superior court should be followed in similar cases by that court and other courts. It was developed to promote consistency in decision-making by judges. There are two types of precedents: binding and persuasive.

Decisions of superior overseas courts, particularly courts within the Commonwealth, which includes Canada, are considered persuasive. This means the precedent set by this decision should be seriously considered; however, it is not required to be followed.

Considering the evolving technology and communication norms, with emojis becoming more common in business emails and digital messages, it is likely that Australian courts will use this decision as a starting point when considering the incorporation of emojis into contract formation.

Key Takeaway

The use of a single emoji during contract negotiations is unlikely to signal the meeting of the minds in contract formation. However, when considered in a broader context, where alternative digital signatures, gestures, or emojis have been used, coupled with a pattern of behaviour throughout a series of negotiations, an Australian Court may be persuaded by South West Terminal Ltd v Achter Land & Cattle [2023] in arriving at a decision as to whether a contract has been formed and accepted.