Agreeing to a contract does not require everyone sitting around a table signing documents; sending a “thumbs up” text message emoji was sufficient to agree to a contract according to a recent Canadian court decision. While the case of South West Terminal Ltd. v. Achter Land, 2023 SKKB 116 has some unique background details that the court relied on to determine that a text message 👍 emoji was enough to agree to a contract worth tens of thousands of dollars, it is critical to recognize that even casual communications like text messages may be relied on as evidence of agreement to a contract.
Before getting into the details, two important details are worthwhile to address. The South West Terminal Ltd. matter was decided by the Court of King’s Bench for Saskatchewan. Saskatchewan is a Canadian province and the Court of King’s Bench is a trial court of general jurisdiction for that province. Therefore, the “thumbs up” emoji decision is a trial court decision from another country and holds, at most, limited persuasive value in American courts. But, the South West Terminal Ltd. decision also contains a quotation of the type of objection that every attorney (whether Canadian or American) would love to make: “Objection. My client is not an expert in emojis.” 🤣😆👏
Getting to the decision itself, the dispute centered on an agreement to buy and sell flax. South West Terminal Ltd. (“SWT”) is a grain company and Achter Land & Cattle Ltd. (“Achter”) is a farming business owned by a gentleman named Chris Achter. Achter sold crops to SWT for years preceding this dispute. The incident in question came about when an SWT representative sent a text message to farm producers stating “Flax Prices: Flax 1 Can (max 6% dockage) $22.50/bu Apr. $17.00 Oct/Nov/Dec del”.
After this message was received by Achter, an individual associated with Achter called the SWT point of contact who sent the text message. The SWT individual later talked on the phone with Chris Achter about the proposed flax contract. Following that call, SWT drafted a contract for Achter to sell 86 metric tons of flax to SWT for $17.00 per bushel for delivery in November 2021. Then, the SWT representative took a picture of that contract and sent it by text message to Chris Achter, with the accompanying message, “Please confirm flax contract”. Chris Achter responded with a 👍.
Achter did not deliver 86 tons of flax to SWT in November 2021. And, in November 2021, the spot price for flax was $41.00 per bushel, significantly higher than the $17.00 per bushel contained in the contract that was in the picture text message from SWT to Chris Achter. Since no flax was delivered, SWT filed suit against Achter for breaching the contract that was proposed by a picture in a text message and allegedly accepted by a “thumbs up” emoji.
For its part, Achter claimed that the “thumbs up” emoji was nothing more than an acknowledgment that the message from SWT had been received. Achter also argued that it would not enter into a contract of that type without reviewing all details and including a type of force majeure provision to protect itself in case it was unable to produce the crops due to things like weather. The Saskatchewan court disagreed and ruled in favor of SWT that the text message emoji was sufficient for Achter to accept the contract that had been texted by SWT in a picture message.
The South West Terminal Ltd. court noted that a contract exists when there is an “offer by one party that is accepted by the other with the intention of creating a legal relationship and supported by consideration.” Additionally, the South West Terminal Ltd. court focused on “how each party’s conduct would appear to a reasonable person in the position of the other party” together with the circumstances surrounding the contract, including the relationship between the parties.
A critical part of the court’s analysis was the interactions between SWT and Chris Achter preceding the thumbs-up emoji incident. Immediately preceding that transaction, Chris Achter and the SWT representative Achter had spoken on the phone about the deal originally proposed by text message, which resulted in SWT putting together the specific contract that was later texted to Chris Achter seeking confirmation of the deal, and to which Chris Achter responded with a 👍. Additionally, in the recent past, SWT had transmitted contracts to Achter via text message or email. SWT sent several other contracts via text message with a request for Achter to confirm the contract, and Chris Achter responded to those offers by texting “Looks good”, “OK” or “yup”. In those circumstances, Achter delivered the product, thereby establishing a course of dealing between SWT and Achter. Based in large part on this history, the South West Terminal Ltd. court did not accept Achter’s defense that the 👍 emoji responding to a request for contract confirmation was merely an acknowledgement that Achter received the text message.
There are some lessons from the South West Terminal Ltd. case. First, although it is a decision from a Canadian provincial trial court, the legal standard is not entirely dissimilar to the analysis an American court would make. For example, in Pennsylvania, “[i]t is black letter law that in order to form an enforceable contract, there must be an offer, acceptance, consideration or mutual meeting of the minds.” In re Est. of Wierzbicki, 174 A.3d 1061, 1065 (Pa. Super. Ct. 2017). “Whether particular conduct expresses an offer and acceptance must be determined on the basis of what a reasonable person in the position of the parties would be led to understand by such conduct under all of the surrounding circumstances.” Mountain Properties, Inc. v. Tyler Hill Realty Corp., 767 A.2d 1096, 1101 (Pa. Super. Ct. 2001) (citing Temple University Hospital, Inc. v. Healthcare Management Alternatives, Inc., 764 A.2d 587, 2000 (Pa. Super. Ct. 2000) (quoting John Edward Murray, Jr., Murray on Contracts § 37, at 82 (3rd ed.1990)). “In cases involving contracts wholly or partially composed of oral communications, the precise content of which are not of record, courts must look to the surrounding circumstances and course of dealing between the parties in order to ascertain their intent.” Mountain Properties, Inc. at 1101 (quoting Boyle v. Steiman, 631 A.2d 1025, 1033 (Pa. Super. Ct. 1993)).
Second, South West Terminal Ltd. cannot be interpreted to mean that every emoji sent in every text message has a legal meaning and can bind someone to a contract. Much of the court’s decision seems to have been based on the specific relationship between SWT and Achter preceding the text message exchange in this case. It is likely that a different outcome would have arisen if Achter had not previously supplied crops to SWT under agreements transmitted by text message where Chris Achter responded with one or two word answers.
Third, while South West Terminal Ltd. does not mean that every text message emoji could be sufficient to agree to a contract, the decision is useful to clarify that contracts can be reached with little formality. While the 👍 response in South West Terminal Ltd. involved a dispute about one deal, the parties in that case reached other significant contract deals via text message. While text messaging can be a quick and informal means of communication, that does not prohibit it from being a way to offer and accept contracts. And, in today’s modern age, it may not be enough to feign ignorance about the meaning of an emoji that you used to try to escape what someone else believes to be a contract acceptance. Great care should be taken in any communication, so that intent is clear and not misunderstood, particularly if there is a course of dealing via text messaging or other informal types of communication.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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