“Thumbs Up” to a Binding Agreement: Contract Acceptance by Emoji

In a recent case that drew international attention, the Saskatchewan Court of King’s Bench ruled that a farmer’s use of the “👍” emoji could be treated as acceptance of a contract to deliver grain at a set price. While this result may seem surprising at first glance, it flows from the court’s application of long-established principles of contract law.

Background

The plaintiff in this case, South West Terminal Ltd. (“South West”), was a grain and crop inputs company, and the defendant, Achter Land & Cattle Ltd. (“Achter Ltd.”), was a farming company owned by Chris Achter. On multiple past occasions, the parties had made agreements where Achter would deliver various grain crops to South West for a set price per bushel. South West’s representative would then draw up the written contract and send it to Mr. Achter by text message, and ask for Mr. Achter’s confirmation of acceptance. Mr. Achter would reply with short responses such as “Looks good”, “Ok”, and “Yup”, and would then go on to deliver the grain according to the agreed-upon terms.

In March 2021, South West’s representative sent Mr. Achter a text message offering to purchase flax seed. They then discussed the purchase by phone, and agreed that South West would purchase 87 metric tonnes of flax seed at $17 per bushel, with delivery in November. South West’s representative told Mr. Achter he would draw up the contract and send it by text message for confirmation. He drew up the contract and signed it, and texted a photo of the contract to Mr. Achter, along with the words “Please confirm flax contract”. Mr. Achter replied to the text message with a single “👍” emoji.

Subsequently, the market price for flax seed increased to $41 per bushel – more than double the price that the parties had discussed in March. When November arrived, Achter Ltd. did not deliver the flax seed to South West. South West then sued Achter Ltd. for the difference between the contract price and the November 2021 market price for 87 tonnes of flax seed, amounting to approximately $82,000.

Court Decision

In court, Achter Ltd. argued that there was no binding contract between it and South West, because Mr. Achter had not agreed to accept the terms of the contract – rather, his “👍” emoji was simply confirmation that he had received the contract, and not confirmation that he was accepting it.

The court rejected this argument. Instead, the court assessed the parties’ prior business communications when discussing the sale of grain. In the past, the parties had clearly understood Mr. Achter’s “curt words” to be confirmation of acceptance of the contract, not merely acknowledgment that he had received it. In determining whether a binding contract had been formed, the relevant test was not what Mr. Achter may have subjectively thought the “👍” emoji meant. Rather, the court needed to consider the objective question of what a reasonable bystander, knowing the relevant background, would understand it to mean. In this case, when viewed in light of the past course of conduct between the parties, a reasonable bystander would have understood that the parties had reached an agreement, just as they had done on multiple prior occasions.

Additionally, the court considered whether the “👍” emoji satisfied the requirement under Saskatchewan’s Sale of Goods Act that in order for a contract for the sale of goods over $50 to be legally enforceable, it must either be partly performed (i.e. the parties must actually deliver some portion of the goods, or pay some portion of the purchase price), or else the parties must sign their acceptance of the written contract. The issue was: by sending the “👍” emoji, had Mr. Achter “signed” the contract?

The court found that he had effectively given his signature. In making this finding, the court referred to previous case law finding the signature requirement was satisfied by electronic signatures, or by clicking an “I Agree” icon on an electronic document. Similarly, in the circumstances of this case, the “👍” emoji was a valid “signature”, despite being a non-traditional way to sign a contract.

Takeaway

On the one hand, the Achter case illustrates the importance of using well-drafted and properly signed contracts. If South West had insisted on having Mr. Achter actually sign a contract for the delivery of flax seed at $17 per bushel, the case likely would not have ended up in court, as Mr. Achter would not have had any arguable defence.

On the other hand, the case also demonstrates that parties usually cannot escape their contractual obligations by attempting to rely on dubious “loopholes” that are contrary to the substance of the agreement – more often than not, this behaviour will get a “👎” from the court.

_{This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.}