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Compared to other forms of communication, authors of text messages tend to prefer brevity. Why use more words when less words will work? Better yet, why use words at all when an emoji can accurately deliver a message? This kind of thinking is common amongst texters, including the defendant in a recent case out of the Saskatchewan Court of King’s Bench, South West Terminal Ltd. v Achter Land & Cattle Ltd., 2023 SKKB 116 [“South West”]. Little did the defendant know, their texting habits would be put under a microscope and become an important piece of Canada’s contract law jurisprudence.
Background
South West Terminal Ltd. (“SWT”) is a grain and crop inputs company located in Gull Lake, Saskatchewan, in the southwest corner of the province. Achter Land & Cattle Ltd. (“Achter”) is a farming corporation in Swift Current, Saskatchewan, near Gull Lake.
Since approximately 2012, SWT had purchased grain from Achter through various contracts. Like many businesses and consumers, the manner in which they conducted business changed following the outbreak of COVID-19 in early 2020. Rather than meet in person to formalize purchase contracts with pen ink, SWT and Achter went remote and began using text messages to confirm their contract offers and acceptances.
This remote arrangement worked smoothly for the first year. An employee of SWT, Kent, would negotiate contract details with the owner of Achter, Chris. These contract details, including such things as the type and volume of grain sought, the price offered, and the period of delivery, would first be discussed verbally over the phone. Once a verbal agreement had been reached, Kent would draft up a contract, apply his signature in ink, then take a photo of the contract. He would then text this photo to Chris, and include in the text a request for Chris to confirm the contract. Chris would reply by sending text messages such as “Looks good,” “Yup,” and “Ok.” The parties would carry on without further contact until sometime during the agreed delivery period, when Achter would deliver the grain and SWT would pay for it.
One day, instead of his typical brief reply of a word or two, Chris simply responded to Kent’s request to confirm a contract with the “thumbs up emoji”. As usual, there was no further contact between the parties. This time however, the delivery period came and went, but Achter did not deliver any grain to SWT. Notably, the market price of the grain at the time of the delivery period was significantly higher than the set contract price. Having missed out on $82,200.21 in profit on the grain, SWT brought an action for breach of contract against Achter to recover this loss, plus interest and costs.
Law
In order to recover its damages, SWT first needed to prove that there was a contract that had been formed and concluded between the parties. If SWT was able to clear that hurdle, then there was little doubt that the contract had been breached by Achter’s failure to deliver.
Justice Keene of the Court of King’s Bench for Saskatchewan discussed the law governing contract formation at paragraph 18 of the decision. In summary, in order for a contract to be valid, a sufficiently certain offer supported by consideration must be made by one party and accepted by the other, with each party objectively intending to be bound by legal consequences.[1]
Intention is not determined subjectively, as in the intention that a party believed (or claims to have believed) was true in their own mind. Rather, intention is determined objectively, as in the intention that a reasonable bystander would conclude that the party had. This reasonable bystander can assess not only the wording of the contract itself and the communication thereof, but also the surrounding circumstances, such as the relationship of the parties and the interests at stake, to determine the parties’ objective intent.[2]
Section 18(1)(b) of Saskatchewan’s The Electronic Information and Documents Act, 2000, SS 2000, c E-7.22 [EIDA] is also relevant to this case. In particular, Justice Keene had to interpret whether Chris’ text of a “thumbs up” emoji was an action in electronic form intended to express SWT’s acceptance.
Analysis
Prior to the controversial thumbs up contract, SWT and Achter had established a pattern of entering into what both parties knew and accepted to be valid and binding contracts in a very similar manner, as described above. Following a verbal agreement, Kent on behalf of SWT would send a picture of a contract that he had signed along with a request for Chris to confirm the contract, and Chris would respond with a very succinct affirmative reply. The parties understood that these replies were not meant merely to confirm receipt of the contract, but rather to confirm the very contract itself. This was objectively understood as, in the words of Justice Keene, “the proof is in the pudding;” without any further contact between the parties, the grain would be delivered and paid for.[3] It was clear in these instances that SWT had made offers that were accepted by Achter with the intention of creating legal relations. The question here was, does the use of a “thumbs up” emoji have the same effect as the written words “looks good,” “yup,” or “ok,” given these circumstances?
A familiar source was turned to as a starting point: Dictionary.com. There, in its “emoji dictionary,” the “thumbs up” emoji is defined as being “used to express assent, approval, or encouragement in digital communications, especially in western cultures.”[4] Next, consideration was given to the conduct of the parties. As they had done in multiple instances previously, Kent and Chris spoke on the phone about a grain contract and appeared to have struck a deal verbally. Shortly after, Kent sent a picture of a contract signed by him, indicating essential terms and requesting that Chris confirm the contract. Chris replied with a “thumbs up emoji”. On a balance of probabilities, Justice Keene was satisfied that this reply constituted Chris’ acceptance of Kent’s offer. This conclusion was explained through a belief that a reasonable bystander would come to the understanding that the parties had reached a meeting of the minds, or “consensus ad idem,” just as they had done on numerous previous occasions. As such, a bona fide contract had been formed.
As for whether the “thumbs up” emoji is qualified as an action in an electronic form capable of expressing acceptance under EIDA, Justice Keene found that it was, referencing paragraph 10 of Quilichini v Wilson’s Greenhouse, 2017 SKQB 10. Specifically, the EIDA legislation is clear that agreement to contractual terms can be expressed by touching or clicking on an appropriately designated icon or place on a computer screen. The fact that there may be another way to execute a contract, such as by printing and signing a hard copy, does not lead to the conclusion that every option available must be used in order to constitute an agreement.[5]
Key takeaways
Justice Keene was wise to identify a possible “floodgates” issue resulting from a finding that a « thumbs up emoji » can legally signify identity and acceptance. For example, what would a “closed fist emoji”, “handshake emoji”, or other emoji symbol mean? Will these questions overwhelm the courts and create ambiguity in commercial dealings? Whether they will or not, Justice Keene reasoned that courts cannot (and should not) attempt to stem the tide of technology and common usage. The courts will simply need to adapt and be ready to meet the new challenges that may arise from the use of emojis and the like in commercial and social settings, as this appears to be the new reality for Canadians.
What can be taken from this case is the importance of clarity and confirming intention in commercial communications, especially when it concerns contractual negotiation. Care should be taken to avoid ambiguity and leaving things open to interpretation, regardless of whether you are on the sending or receiving end of an unclear message.
If you are unsure about the clarity of your contractual communications and would like an expert to step in and handle them for you, or require legal services for any other of your business needs, Miller Thomson LLP is ready to help. Contact one of our offices and we would be happy to direct you to an appropriate member of our team.
[1] South West Terminal Ltd. v Achter Land & Cattle Ltd., 2023 SKKB 116 at para 18 [South West].
[2] Ibid.
[3] South West, supra note 1 at para 21.
[4] “thumbs up emoji”; Dictionary.com online: <https://www.dictionary.com/e/emoji/thumbs-up-emoji/> (12 July 2023)
[5] Quilichini v Wilson’s Greenhouse, 2017 SKQB 10 at para 10.
