Can a thumbs up emoji create legally binding obligations? The Supreme Court of Canada may consider this in the case of Achter Land & Cattle Ltd. v South West Terminal Ltd.
The Supreme Court of Canada is considering a leave to appeal application filed by Achter Land & Cattle Ltd. (Achter Land).
Saskatchewan courts found Achter Land liable for breaching a contract it entered into by responding to a text message offer with a thumbs up emoji. A justice of the Saskatchewan Court of King’s Bench and two justices of the Court of Appeal for Saskatchewan agreed that Achter Land’s thumbs-up emoji represented its acceptance of the offer and an electronic signature.
The facts
Achter Land, a farming corporation, and South West Terminal Ltd. (South West), a grain and crop inputs corporation, had a long-standing business relationship. They had a pattern of entering into deferred delivery grain contracts through text message exchanges. Kent Mickleborough, a South West grain buyer, and Chris Achter, Achter Land’s principal, would negotiate contract terms. Kent would prepare a written contract based on the negotiated terms, sign the contract on behalf of South West, take a photo of the signed contract, and then text the photo to Chris with a request for a response. Chris would confirm the contracts he received from Kent with a one or two-word text message, like “Looks good”, “Ok”, or “Yup”. Then Achter Land would fulfil its promises under the contracts by delivering the required grain to South West.
The legal dispute between South West and Achter Land arose because of a somewhat unique text message exchange between Kent and Chris on March 26, 2021. As they had done in the past, Kent and Chris negotiated contract terms that day. Then, as he had done in the past, Kent prepared a written contract based on the negotiated terms, signed the contract on behalf of South West, took a photo of the signed contract, and texted the photo to Chris with a request for a response. However, unlike in the past, Chris responded to Kent’s text message with a thumbs up emoji. Then, Achter Land did not fulfil its promises under the contract – it delivered no grain to South West.
South West sued Achter Land for breaching the March 2021 contract. Achter Land took the position that the parties had not formed a contract. Chris suggested his thumbs up emoji simply confirmed he received the proposed contract from Kent. It did not confirm that he agreed to the proposed contract’s terms. In the alternative, Achter Land argued that any contract it entered into was unenforceable because it did not meet the requirements in section 6(1) of Saskatchewan’s The Sale of Goods Act.
The Court of King’s Bench decision
South West’s action proceeded before Justice Keene of the Court of King’s Bench for Saskatchewan.
The first thing he considered was whether the parties had formed a contract. Justice Keene noted that a contract exists where:
- one party makes an offer,
- that the other party accepts,
- with the intention of creating a legal relationship, and
- supported by consideration (an exchange of promises).
He also noted that determining whether two parties formed a contract involves considering how a reasonable bystander would view their words and actions. The test is objective. What the parties subjectively had in mind is not determinative.
Justice Keene went on to determine the parties had formed a contract. He found that:
- South West made an offer to Achter Land on March 26, 2021 when Kent texted a photo of a proposed flax contract to Chris with a message that read, “Please confirm flax contract”.
- Chris accepted the offer (on behalf of Achter Land) by responding to Kent’s text message with a text message containing a thumbs up emoji.
- Given the parties’ long-standing business relationship and pattern of entering into contracts through text message exchanges, Chris’ use of the thumbs up emoji showed his approval of the flax contract. In this case, the thumbs up emoji was “an action in electronic form” that could be used to express “the acceptance of an offer” under section 18(1) of Saskatchewan’s The Electronic Information and Documents Act, 2000.
The consideration requirement was not in issue as it was clear the parties would be exchanging money for flax. The flax contract said Achter Land would deliver 87 tonnes of flax to South West for a price of $669.26 per tonne.
After determining there was a contract between the parties, Justice Keene considered Achter Land’s alternative argument that the contract was unenforceable because it did not meet the requirements in section 6(1) of The Sale of Goods Act. Section 6(1) says, “[a] contract for the sale of goods of the value of $50 or upwards shall not be enforceable by action … unless some note or memorandum in writing of the contract is made and signed by the party to be charged or his agent”.
Justice Keene determined that:
- the text messages Kent and Chris exchanged on March 26, 2021 met the writing requirement, and
- Kent’s physical signature on the flax contract and Chris’ text message to Kent containing the thumbs up emoji (electronic signature) met the signature requirement.
The court ordered Achter Land to pay South West $82,200.21 in damages for their breach of contract (non-delivery of the flax). The damages Justice Keene awarded equaled the difference between the price set out in the flax contract and the market price of flax at the end of November 2021, when Achter Land should have delivered the flax.
The Court of Appeal decision
Achter Land filed an appeal from Justice Keene’s decision with the Court of Appeal for Saskatchewan. Three appellate justices heard the appeal. Two of them determined Justice Keene did not err in concluding that the parties formed a contract and that the requirements in section 6(1) of The Sale of Goods Act were met through the March 26, 2021 text exchange between Kent and Chris.
The Court of Appeal dismissed Achter Land’s appeal.
Appeal to the Supreme Court of Canada
Achter Land applied for leave to appeal the Court of Appeal for Saskatchewan’s decision to the Supreme Court of Canada. The Supreme Court of Canada’s decision on the leave application is pending as of the date of this article.
If the Supreme Court of Canada does not grant leave to appeal, then the decision of the Court of Appeal for Saskatchewan stands. If the Supreme Court of Canada grants leave to appeal, then it will review the Court of Appeal for Saskatchewan’s decision and issue its own decision.
A cautionary tale
The Saskatchewan decisions in the case of South West and Achter Land have potential implications for those doing business in Saskatchewan and other Canadian jurisdictions. Many provinces, including Alberta, have similar provisions to those found in Saskatchewan’s The Sale of Goods Act and The Electronic Information and Documents Act.
People who use informal electronic means – like text messages – to communicate about potential business opportunities should proceed with caution. Sending a quick emoji may lead to legally binding obligations.
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DISCLAIMER The information in this article was correct at time of publishing. The law may have changed since then. The views expressed in this article are those of the author and do not necessarily reflect the views of LawNow or the Centre for Public Legal Education Alberta.
About Jennifer Taylor
