Emojinal Damage: South West Terminal Ltd. v Achter Land, 2023 SKKB 116 (South West Terminal)

Published on: August 2023 | What's Trending

Thumb up symbol, golden finger up icon, gold

A recent case from the Court of King’s Bench for Saskatchewan, the second highest in the Province, ruled that the use of the “thumbs-up” emoji over text message can be akin to a valid signature reflecting acceptance of a contract.

Arising out of a dispute between a Saskatchewan farmer and a crop-buying company, the resulting order required the defendant seller – held to be in breach of contract due to non-delivery of goods – to pay the buyer $82,200.21 in damages. The case has made headlines both within the Canadian legal community and beyond, as it underscores the challenges courts face with evolving trends of commercial engagement in the modern digital economy.

Kent Mickleborough was agent for the grain and crop input company, South West Terminal Ltd. (SW). Mr. Mickleborough, along with SW as a whole, had a long-standing business relationship with Chris Achter, representative of the defendant seller Achter Land & Cattle Ltd. (Achter). In March of 2021, Mickleborough sent a text to Achter stipulating that his company was looking to buy 87 metric tonnes of flax at $17 per bushel (which amounts to $669.26 per tonne), to be delivered in November of 2021. Essentially, much like the prior contract negotiations between the two, the parties agreed on a fixed price and volume of grain over the phone. At that point, Mickleborough drafted the contract with his signature attached and texted the contract to Achter’s usual cell phone number. The text stated, “Please confirm flax contract”, to which Achter replied with a thumbs-up emoji, giving Mickleborough the impression (from past practice) that Achter had accepted the contract. However, when performance became due in November, Achter failed to deliver and the market price of flax spiked to $41 per bushel (roughly, $1,614 per tonne), thereby prompting the lawsuit.

In its later defence, Achter maintained that Mr. Achter had used the thumbs-up emoji merely to convey his receipt of the contract. However, presiding Justice T.J. Keene deemed this “self-serving”, finding that: “…it is important to note that each time Kent added to the offered contract ‘Please confirm terms of durum contract’ and Chris did so by succinctly texting ‘looks good’, ‘ok’ or ‘yup’. The parties clearly understood these curt words were meant to be confirmation of the contract and not a mere acknowledgement of the receipt of the contract by Chris.”[1] As a result, “…a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions.”[2] The court reminded that, fundamentally, the legal principles relating to contract formation were simply: i) an offer, ii) acceptance of the offer, iii) exchange of value, and iv) intention to establish legal, rather than social, obligations. The court then concluded that the thumbs-up emoji constituted an “electronic signature” under the Province’s Electronic Information and Documents Act, 2000, SS 2000, c E-7.22.

The South West Terminal decision is especially significant because, despite a growing body of so-called “emoji case law” in Western jurisdictions, Canadian jurisprudence has been relatively silent on such issues. However, readers should understand that a lot remains to be determined in terms of the scope of its application. Indeed, counsel for Achter submitted that ruling in SW’s favour would “open up the floodgates” to allow all sorts of cases coming forward asking for interpretations as to what various different emojis mean, and it remains to be seen how courts will continue to distinguish and nuance such matters. The court seemed to acknowledge such challenges with scope when it noted: “this court readily acknowledges that a [thumbs-up] emoji is a non-traditional means to ‘sign’ a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a ‘signature’ – to identify the signator (Chris using his unique cell phone number) and as I have found above – to convey Achter’s acceptance of the flax contract[3]. In other words, the consistent and longstanding conduct of the contracting parties – rather than judicial expansion of what constitutes a contractual meeting of the minds – seems to have driven Justice Keene’s decision to award damages. Therefore, anyone assuming that emojis simply now form contracts should proceed with extreme caution. On the flip side, since courts may now recognize such informal communications as acceptances of agreement, it is important to consider any ambiguity in the potential interpretation of the emoji and to be expressly clear – even if informality and brevity are often why forms of communication such as text message are being used in the first place.

[1] South West Terminal Ltd. v Achter Land, 2023 SKKB 116 at para 21
[2] Ibid at para 36
[3] Ibid at para 63

The author would like to thank James Moskowski, Summer Student-at-Law, for his assistance with this blog.