With advances in technology and the commonality of using electronic means to sign and execute documents, it is no surprise that we are now seeing cases being handed down from the Courts regarding emojis and their place in the construction of contracts.
Emojis are small images that can be inserted alongside text (think a little smiley face after saying hello). A Canadian judge has ordered a farmer to pay approximately AUD $92,000 after ruling that a “thumbs up emoji” used in a text message exchange was just as valid as a signature, these little pictures potentially now have a significant bearing on construing the circumstances surrounding the creation of a contract.
South West Terminal v Achter Land & Cattle Ltd
The Court of King’s Bench in the Canadian province of Saskatchewan heard that the grain buyer Kent Mickleborough, who was looking to buy flax and had sent a message to a number of producers.
Mickleborough spoke with farmer Chris Achter over the phone before drafting a contract in which the company he worked for, South West Terminal, offered to buy 86 tonnes of flax for delivery in November.
He signed the contract, took a photo of it, and sent it via a text message to Achter along with the message: “Please confirm flax contract.”
Achter responded with a “thumbs-up” emoji, according to legal documents. But come November, the flax didn’t arrive.
During the proceedings, it had been heard that Mickleborough had done “at least four” other contracts with Achter via text, but usually, Achter responded with an “ok”, “yup” or “looks good”.
In his affidavit, Achter said the “thumbs up” emoji was simply a confirmation that he had received it stating:
“The thumbs-up emoji simply confirmed that I received the Flax contract. It was not a confirmation that I agreed with the terms of the Flax Contract. The full terms and conditions of the Flax Contract were not sent to me, and I understood that the complete contract would follow by fax or email for me to review and sign…. I did not have time to review the Flax Contract and merely wanted to indicate that I did receive his text message.”
In his findings, the Judge remarked that:
“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…
“I am satisfied on the balance of probabilities that Chris [Achter] okayed or approved the contract just like he had done before except this time he used a thumbs-up emoji,” he said…
“In my opinion, when 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 – a meeting of the minds – just like they had done on numerous other occasions.”
Ambiguity in contracts
As seen above, ambiguity as to the acceptance of the offer led to a serious and costly dispute, one of which came down to the presence of a small picture in a text message exchange. In cases like these, it is easy to see why agreements that are poorly drafted or contain elements of ambiguity are the leading cause of contractual disputes between parties.
If you are in the process of negotiating an agreement or drafting a contract, please see our top tips to write a clearer contract and potentially save yourself from a costly dispute:
- Keep it simple. The simpler a contract is, the clearer the terms will be to the parties involved. Use plain English and write shorter and more concise sentences.
- If it is part of the agreement, include it in the contract. Anything previously discussed between the parties that has been agreed on should be included in the contract to make it a complete document that reflects the parties’ true intentions.
- Define key terms where applicable. If a word has more than one meaning, make sure your document refers to the agreed meaning of that word throughout the document.
- Execute the contract properly. If you are signing the document as different parties (e.g., in your personal capacity and as a director of a company) make sure the contract reflects this properly and make sure it is executed by all parties in an appropriate manner (i.e., wet signature or digital signature).
- Obtain legal advice regarding the terms of the agreement.
- Instead of using an emoji, express your acceptance or rejection of an offer in words.
If you require assistance with negotiating the terms of a commercial agreement or any part of a commercial dispute resolution process, feel free to contact our office to arrange a consultation with one of our experienced lawyers at 9375 3411.
About the Authors: This article has been co-authored by Chanelle Kane and Steven Brown. Chanelle has been in the industry since 2013 and graduated with a Bachelor of Laws in 2020. Chanelle completed the Graduate Diploma of Legal Practice with the College of Law in 2020 and was awarded the 2020 PLT Professional Excellence Award for the cohort. Chanelle was admitted to practice in the Supreme Court of Western Australia in November 2020 and to the High Court of Australia in January 2021. Steven is a Perth lawyer and director, and has over 20 years’ experience in legal practice and practices in commercial law, dispute resolution and estate planning.