Partner Debbie Brett, in our Corporate & Commercial team, looks at a recent case in Canada.
On 8 June 2023 a Canadian Court ruled that the thumbs-up emoji can be enough to show the acceptance of a contract.
To provide some context, the criteria for a legally binding contract, is as follows:
- Offer: a party must make an offer to the other. In this case the buyer, South West Terminal Ltd (“SWT”), made an offer to the seller, Achter Land & Cattle Ltd (“ALC”), to purchase some flax.
- Acceptance: the other party must accept the offer. SWT sent ALC a picture of the contract, by text message, which stated that ALC will deliver the flax in November 2021. Chris Achter of ALC was asked to confirm the ‘flax contract’, to which he responded with a thumbs-up emoji. SWT interpreted this as ALC’s acceptance of the contract.
- Consideration: each party must give consideration to the other, this is often the promise to provide services in exchange for money. In this case, the flax was to be purchased for $669.17 per tonne, or $17 a bushel.
- The objective test of showing an intention to be legally bound: both parties should have an intention to be legally bound by the agreement. A key matter of this case was that SWT and ALC had a longstanding commercial relationship, and they had both conducted and agreed to business through SWT sending photographs of contract terms to Mr Achter who agreed to them by text, often with one word replies such as ‘okay’ and ‘yup’. As SWT had created at least 15/20 contracts through this type of correspondence, there is, therefore reason for an objective test to conclude that the parties had an intention to be legally bound based on previous methods on concluding contractual negotiations.
- The parties have contractual capacity:Parties must have sufficient capacity to be able to enter into a contract. To prove such capacity, the parties must be legal entities recognised by law. Such legal entities include: companies, limited liability partnerships and individuals of at least 18 years of age. In this case, both of the parties are companies and therefore have sufficient contractual capacity.
Despite the above, when SWT was due to receive the flax, nothing showed up.
The Canadian Court’s findings
Justice Timothy Keene of the Court of King’s Bench in the province of Saskatchewan, Canada found that, even though it is unconventional, the thumbs-up emoji is a valid means to ‘sign’ a contract.
Justice Keene stated the use of the thumbs-up and other such emojis represent a “new reality” in Canada and that courts need to be ready to meet the challenges that emojis present.
As a result of the findings, SWT were awarded $82,000 in damages.
What this means for your business
As this case was heard in Canada, it is not directly applicable to English law. However, the position taken by Justice Keene may be instructive as to how English courts would react in similar cases.
This case highlights the importance of clarity when communicating different aspects of contracts and the importance of ensuring that what is agreed between the parties is what is intended.
Ambiguity in contractual acceptance or terms is fertile ground for litigation and could cost valuable time and money.
Our Corporate & Commercial team would be delighted to help you to ensure your contracts as a clear as possible to help you to avoid costly disputes. We provide services in relation to all aspects of contract formation, including the drafting and reviewing of contracts or specific key terms.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.