- July 15, 2023
- Posted by: azimi
- Category: Uncategorized
Case Study of Southwest Terminal Ltd. v. Achter Land
A case that was released on June 8, 2023 from the Saskatchewan Court of King’s Bench determines, at least within the jurisdiction of the Province of Saskatchewan, an interesting issue for the world of commerce, which is: Can a thumbs-up emoji, in the right circumstances, be legally recognized as a valid form of acceptance of an offer that creates a legal contract?
The Plaintiff alleged that the parties entered into a deferred delivery purchase contract on March 26, 2021 in which the Plaintiff agreed to buy and the Defendant agreed to deliver 87 metric tons of flax for a contracted price of $669.26 per tonne, with delivery between November 1 and 30, 2021. The Plaintiff claimed $82,200.21 in damages for breach of contract. The Defendant denied entering into the contract and pled that there was no note or memorandum of the contract made or signed by the parties. The fact that the Plaintiff had made an offer was uncontroversial; what was disputed was whether the Defendant’s thumbs-up emoji sent in response amounted to acceptance of the offer.
Therefore, the main issue in this case was whether a contract existed and, in particular, whether there was a meeting of the minds.
The main legal principles in this area are as follows. A contract is only formed where there is an offer by one party that is accepted by the other with the intention of creating a legal relationship supported by consideration. Whether this has happened in any case is viewed in accordance with an objective theory of contract formation: that is, whether the parties indicated to the outside world, in the form of the objective reasonable bystander, their intention to create a contract and the terms of such contract. The question is not what the parties subjectively had in mind, but whether their conduct was such that a reasonable person would conclude that they had intended to be bound.
The parties had a business relationship that went back to about 2015. In this particular case, the Plaintiff had drafted and texted a flax contract to the Defendant and stated “Please confirm flax contract.” The Defendant texted back a thumbs-up emoji.
As an important piece of background context, the parties had indisputably come to previous agreements – the so-called durum contracts – by the Plaintiff texting durum contracts to the Defendant and stating “Please confirm durum contract” and the Defendant stating “ok”, “yup” or “looks good.”
A key factual issue was the meaning of the thumbs-up emoji. The Plaintiff cited online sources that indicated it means “I agree”. The Defendant disagreed with that contention and maintained that he is generally unaware of what a thumbs-up emoji means and in particular what he meant to convey to the Plaintiff in the relevant communication. The Court found that it has a dictionary definition and does indicate a positive affirmation.
A key point of factual dispute arose as to whether further communications took place between the parties around the time of the relevant communication. The Defendant alleged there were no more communications, except a brief discussion, whereas the Plaintiff alleged that a telephone call had taken place where the contractual terms were discussed in more detail. The Court found that the telephone call had in fact occurred.
In its overall legal analysis, the Court found that a reasonable bystander, who knew all of the background, would conclude that the parties had reached a meeting of the minds – just as they had done with regard to other contracts in previous dealings. The Defendant accepted this contract, just like he had accepted previous ones, only, this time he used a thumbs-up emoji.
Notwithstanding the Defendant’s argument that allowing an emoji to signify identity and acceptance would open up the floodgates to allow cases about what various different emojis mean, the Court stated “this Court cannot … stem the tide of technology and common usage – this appears to be the new reality in Canadian society.”
In the final result, it was held that a valid contract existed between the parties and that the Defendant had breached that contract by failing to deliver the flax. The Defendant was, accordingly, ordered to pay the damages sought.
A weak aspect of this decision is that the final order is at least partially based on the judge’s conclusion that a certain telephone conversation had occurred, clarifying the terms of the contract in dispute, which the Defendant denied having. This appears to be a credibility issue, which seems to weigh in favor of a trial and not merely a summary judgment hearing process.
Besides that procedural point, a couple other substantive arguments can be conceived against the determination that an emoji should be legally recognized as a way to effect contractual acceptance. First, there is a long history of tradition that a contract is accepted by being signed – which has arguably given rise to a widely-held expectation by members of the public that their signature is required to conclude an agreement and nothing less.
Secondly, the motions judge used, as a basis for finding that the thumbs-up emoji has an objective meaning, a dictionary entry for it in www.dictionary.com which is a less authoritative source for the English language than, for example, the Oxford and Cambridge dictionaries. A cursory review of those sources seems to suggest they do not have dictionary entries for the emoji, which challenges the judge’s notion it has a universal meaning.
Thirdly, the formal aspect of putting one’s signature, in order to accept an offer and form a contract, can be seen to be a safeguard against weak parties being pressured into contracts. It is easier for weak parties to resist undue influence, being used to pressure them into a contract, if the requirement is a unique and exertive signature than if it is an easily clickable and generic symbol.