Is a👍a Signature? Exploring the Implications of the “Emoji Case”

The “emoji case” gained international attention when a Saskatchewan court ruled that a thumbs-up emoji sent via text message constituted a valid signature in a contract dispute. The case, Achter Land & Cattle Ltd. v. South West Terminal Ltd., highlights the evolving landscape of electronic contracting and the potential legal significance of emojis.

The Ruling and Its Context

The Saskatchewan Court of Appeal upheld the finding that the thumbs-up emoji satisfied the signature requirement under s. 6(1) of The Sale of Goods Act. The majority decision emphasized that this ruling was based on the specific facts of the case, particularly the parties’ history of informal contracting via text messages.

The case arose when South West Terminal Ltd. (SWT) sought to finalize a deferred delivery purchase contract for flax with Achter Land & Cattle Ltd. (ALC). Following a phone discussion, SWT’s representative sent a photo of the signed contract’s front page via text and requested confirmation. ALC’s representative responded with a thumbs-up emoji. When ALC failed to deliver the flax, SWT sued for breach of contract. The Court awarded SWT over $82,000.00 in damages, the difference between the contract price and the market replacement cost.

ALC’s appeal centered on whether the thumbs-up emoji constituted a signature or merely acknowledged receipt of the contract. The Court of Appeal upheld the lower court’s decision, finding that a reasonable bystander, informed by the parties’ prior conduct, would interpret the emoji as an agreement to the contract terms.

Key Takeaways from the Decision

1. History Matters: The Court’s decision heavily relied on the parties’ history of contracting informally through text messages. On previous occasions, ALC’s representative had replied to texted contract photos with phrases like “ok” or “yup” and subsequently fulfilled the agreements. This pattern led the Court to conclude that the emoji, in context, represented consent.
2. Objective Interpretation: Canadian courts assess the actions of contracting parties from the perspective of an “objective reasonable bystander.” The ruling emphasized that subjective intent is secondary to how actions are objectively perceived.
3. Limits of the Decision: The majority stressed that the ruling was confined to the specific facts of this case. The thumbs-up emoji was deemed a valid signature only because of the established context. The Court did not suggest that all emojis signal agreement.

Broader Implications for Contracting

The “emoji case” underscores the importance of clarity in electronic communications. Informal contracting methods, while efficient, can lead to disputes over interpretation. The emoji case is one of many in which Canadian courts have found that, from the perspective of an objective reasonable bystander, a party was legally bound by a contract, even if the party did not recognize that they had entered into one. For example, in Lithium Royalty Corporation v. Orion Resource Partners (“Lithium”), the Ontario Superior Court of Justice determined that an email reply that said “OK, sounds good” was a binding acceptance of a contract. Similar to the emoji case, the defendant argued they did not intend to be bound, but the Court found their conduct indicated otherwise.

Best Practices to Avoid Ambiguity and Minimize Disputes:

• Set Clear Expectations: At the outset of negotiations, specify how contracts will be executed and approved.
• Label Drafts: Mark preliminary documents as “draft” to prevent misunderstandings.
• Formalize Signing Procedures: Use standardized methods, such as electronic signature platforms, to ensure compliance with legal requirements.
• Limit Informal Approvals: Train negotiation teams to avoid casual language or emojis when discussing contractual terms.
• Document Intent: Clearly state when parties intend to be bound by an agreement.