The use of technology in the legal field is rapidly evolving. From the use of artificial intelligence tools like ChatGPT to the shift from in-person to virtual courtrooms, it is clear that the law needs to be adaptable and flexible in this new digital age.
A recent shift in this direction came with the recent ruling of Justice T.J. Keene of the Court of the King's Bench in Saskatchewan. This decision broadened the scope of what constitutes "acceptance" of a contract. The case arose within the context of a dispute over a grain company's contract to buy flax from a farm.1 In a sensational decision which attracted the interest of media outlets across Canada, the US, the UK, and even India, Justice Keene held that a "thumbs-up" emoji ("👍" ) constituted valid acceptance of a contract.
Facts of the Case
The plaintiff in this case was South West Terminal, a grain and crop inputs company. Kent Mickleborough worked as a Farming Representative for South West and acted as the primary grain buyer for the corporation. The defendant was Achter Land & Cattle, a farming operation owned and operated by Chris Achter.
Since 2012, South West regularly purchased grain for their operations from Achter. The dispute resulted from an agreement formed on March 26, 2021, when Mr. Mickleborough texted Mr. Achter to obtain a new contract for flax. Following a phone call with Mr. Achter to finalize the amount of flax, the price, and the delivery date, Mr. Mickleborough drafted a contract with the terms discussed in the phone call. Under this agreement, Achter would sell 86 metric tonnes of flax at $17.00 per bushel, or $669.26 per tonne, to South West, with delivery scheduled for November. Mr. Mickleborough signed the contract, then texted a photo to Mr. Achter with the message "Please confirm flax contract." Mr. Achter responded with a "thumbs-up" emoji.2
When November came, Achter failed to deliver the flax to South West. By that time, the price of flax had skyrocketed to $41.00 per bushel or $1,614.09 per tonne.3
In response, South West sued Achter for breach of contract and damages in the amount of $82,200.21.4 The defendant took the position that he never entered into a contract and that the emoji represented his acknowledgement of the contract, not his acceptance. The Court had to consider the following question: was there a contract that Achter agreed to via an emoji?
Was There a Meeting of the Minds?
A contract is formed when there is an offer made by the offeror and an acceptance by the offeree, with the intention of creating a legal relationship supported by consideration.5 Acceptance of the offer by the offeree must be communicated to the offeror so that there is consensus ad idem between the parties or a "meeting of the minds."6 However, as Achter argues, a mere acknowledgement of an offer is insufficient to constitute acceptance and make the offer binding on both parties.7
Whether a contract exists is determined through the objective theory of contract formation, or how each party's conduct appears to an objective and reasonable person in the other party's position.8 As such, acceptance does not need to be made in express terms, but can be implied through the parties' conduct. For instance, courts have determined that by clicking the "I Agree" box to terms of service agreements online, you agree to be bound to a "click-wrap" agreement.9 What the parties subjectively had in mind is irrelevant to the analysis, and courts can consider the surrounding circumstances of the agreement and the parties' relationship in their analysis.10
In this case, Mr. Achter had a long-standing business relationship with Mr. Mickleborough. Mr. Mickleborough would call Mr. Achter or speak with him in person and determine the essential terms of the contract in terms of quantity of grain, the price, and the time of delivery. After they had come to a consensus, Mr. Mickleborough would draft a contract based on their discussion and send it to Mr. Achter. Mr. Achter previously agreed to contracts sent over text by Mr. Mickleborough by responding, "Looks good," "Ok," and "Yup."11
Justice Keene found that:
The parties clearly understood these curt words were meant to confirm the contract and were not a mere acknowledgement of the receipt of the contract by Chris [Mr. Achter]...Chris delivered the grain as contracted and got paid. There was no evidence he was merely confirming the receipt of a contract and was left just wondering about a contract.12
Justice Keene then addressed Mr. Achter's denial that the "thumbs-up" emoji can mean "I agree." Justice Keene utilized the Dictionary.com definition of the "👍" emoji, which states that it "is used to express assent, approval, or encouragement in digital communications, especially in Western cultures." As such, Justice Keene concluded that:
...[W]hen considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item [sic] – a meeting of the minds – just like they had done on numerous other occasions.13
Were the Terms too Uncertain?
For a contract to be binding, there must be certainty concerning the material or essential terms of the contract, such as the quantity of goods, payment, and delivery.14 Where parties fail to reach an agreement on essential terms or express themselves in a way that prevents the Court from interpreting their agreement, the agreement will be unenforceable due to lack of certainty of terms.15 However, where the parties intended a binding agreement, courts will attempt to fill gaps and find meaning in agreements.16
Here, Mr. Achter relied on two main facts to support his contention that the contract should be declared void for uncertainty:
(1) Mr. Mickleborough did not include a photograph of the "General Terms and Conditions" located on the back of the contract; and
(2) The contract described the delivery period as "Nov," which is too vague.
Justice Keene rejected these arguments.
The modern approach to interpreting contracts requires the courts to look at the "factual matrix" or the surrounding circumstances of the contract. This requires the Court to interpret contracts in light of what the parties intended and what they knew at the time of contract formation.17
Here, the parties had a long-standing business relationship. Mr. Achter entered into many purchase contracts with South West in the past, and the terms and conditions were repeatedly set out in these contracts and had never changed. Justice Keene found that Mr. Achter would have already known the contract's terms and conditions from the previous agreements' terms and conditions. Moreover, Mr. Mickleborough provided the essential terms of the contract – namely, the parties, goods, and price – to Mr. Achter in the picture on the first page of the contract.
Justice Keene also rejected Achter's argument that there was any uncertainty surrounding the delivery date. Based on previous dealings and the context of discussions surrounding the contract, the only logical interpretation was that "Nov" referred to November 2021.
Did the Contract Meet Statutory Requirements?
Finally, Achter challenged the contract based on section 6 of the Saskatchewan Sale of Goods Act:
6(1) A contract for the sale of goods of the value of $50 or upwards shall not be enforceable by action unless the buyer shall accept part of the goods so sold and actually receive the same or give something in earnest to bind the contract or in part payment or unless some note or memorandum in writing of the contract is made and signed by the party to be charged or his agent in that behalf.
(2) This section applies to every such contract notwithstanding that the goods may be intended to be delivered at some future time or may not at the time of the contract be actually made, procured or provided or fit or ready for delivery or that some act may be requisite for the making or completing thereof or rendering the same fit for delivery.
(3) There is an acceptance of goods within the meaning of this section when the buyer does any act in relation to the goods which recognizes a pre-existing contract of sale whether there be an acceptance in performance of the contract or not.18
A similar provision in the Ontario Consumer Protection Act, 2002 requires that all agreements for goods and services over $50 must be in writing.19 The question here is whether the "in writing" and "signature" requirements are met in this case.
Justice Keene determined that the requirements were met. The contract was in writing and signed by Mr. Mickleborough on behalf of South West. Moreover, the "thumbs-up" emoji sent by Mr. Achter from his unique cell phone number satisfied the signature requirement on his part. Although Justice Keene admitted that this was a non-traditional signature, the underlying purpose of s. 6 of the SGA is to prevent fraud. In this case, there was no question of the authenticity of the text message.
As a result, Justice Keene found that Achter was liable to South West for $82,200.21 in damages, plus interest accumulated after November 30, 2021, and granted South West's motion for summary judgment.
Conclusions
As seen in South West, a "thumbs-up" emoji can, in some circumstances, constitute a party's acceptance of a contract. However, this finding is highly fact-specific and depends on the parties' prior relationship and past conduct. Despite concerns about opening up the floodgates for the judicial interpretation of emojis, the courts cannot ignore this new development in Canadian contract law. Justice Keene concluded that:
[T]his Court cannot (nor should it) attempt to stem the tide of technology and common usage – this appears to be the new reality in Canadian society, and courts will have to be prepared to meet the new challenges that may arise from the use of emojis and the like.20
While it remains to be seen whether Ontario courts will follow this ruling, business owners and consumers should be aware of the potential legal implications of emojis in this new digital era.
This blog was co-authored by Summer Law Student, Leslie Haddock and Articling Student, Toni Pascale.
Footnotes
1. South West Terminal Ltd v Achter Land, 2023 SKKB 116 [South West].
2. Ibid at para 15.
3. Ibid.
4. Ibid at para 1.
5. Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v Aga, 2021 SCC 22 at para 35 [Aga].
6. Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256.
7. McIsaac v Fraser Machine & Motor Co, 1910 CarswellNS 153.
8. Aga, supra note 5 at para 35.
9. See Rudder v Microsoft Corp, 1999 CanLII 14923 (ON SC).
10. Aga, supra note 5 at paras 37-38.
11. South West, supra note 1 at para 19.
12. Ibid at para 21.
13. Ibid at para 36.
14. May and Butcher Ltd v The King [1929] ADR L R 02/22.
15. South West, supra note 1 at para 43.
16. Ibid.
17. Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53 at para 46.
18. RSA 2000, c S-2, ss 6(1)-(3) [SGA] [emphasis added].
20. South West, supra note 1 at para 40.
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