In an interesting legal development, the Court of King’s Bench in Saskatchewan recently recognized a thumbs-up emoji as a legitimate way of communicating acceptance of a contract and ordered more than $82,000 in damages for breach of contract.
This decision may impact all businesses that communicate and discuss contract terms via informal communication methods, such as WhatsApp, Telegram, Messenger, WeChat, etc.
WHAT DO YOU NEED TO KNOW?
The Buyer claimed they entered into an agreement to purchase 87 metric tonnes of flax from the Seller at a contracted price of C$17 per bushel. The order was supposed to be delivered between November 1st and November 30th, 2021.
The Buyer drafted, signed, and texted a picture of the written contract to the Seller with the text: “Please confirm flax contract”, to which the Seller responded with a “👍”. However, the Seller failed to fulfill the order, and the Buyer filed a lawsuit against the Buyer for breach of contract.
Both sides argued over the meaning of the “thumbs-up” emoji:
- The Buyer believed it meant the Seller agreed to the contract terms, but the Seller disagreed.
- The Seller argued that they only used the “thumbs-up” to confirm they had received the contract. In addition, the Seller also claimed they had not signed any written contract.
THE COURT’S DECISION
The question before the Court was not what the parties believed subjectively, but whether a reasonable person would conclude both the Seller and Buyer accepted the terms of the contract and formed a legally binding relationship.
The Court considered a few key factors:
- The transaction history between the Buyer and the Seller was crucial because it indicated a prior pattern of conduct, where they used similar forms of informal communication to create contracts many times in the past.
- There were previously completed contracts, to which the Seller used text messages to confirm acceptance of the terms and delivered on each of the contracts. The phrases used in the texts were “looks good”, “ok”, and “yup”.
- The “👍” was found by the Court to be an ‘action in electronic form’. In simpler words, it was sufficient to express acceptance of the contract, replacing a signature, just like the “looks good”, “ok”, and “yup” from before.
LESSONS TO BE LEARNED
You do not need to sign something to create legal obligations. A variety of behaviours, actions, and conduct can create legal obligations, even informal ones.
If you require assistance with commercial contracts, get in touch with us to learn more!
Disclaimer: This Blog is intended to provide readers with general information on legal developments in the areas of contract law and business law. It is not intended to be a complete statement of the law, nor is it intended to provide legal advice. No person should act or rely upon the information contained in this blog without seeking legal advice.
Case: South West Terminal Ltd. v Achter Land and Cattle Ltd. (2023 SKKB 116) (CanLII)