South West Terminal Ltd. v Achter Land: Contractual and Evidential Implications
By: Professor Olabisi D. Akinkugbe, Schulich School of Law, Dalhousie University & Professor Robert J. Currie, K.C., Schulich School of Law, Dalhousie University.
The decision of the King’s Bench Division for Saskatchewan on June 8, 2023,1 upholding the validity of a thumb’s up emoji as a valid means of concluding a contract, has received mixed reviews amongst private law enthusiasts. In our view, while the decision is important in some regards, it raises more questions than it answered from complex contractual and evidential perspectives. In this review, we raise three important implications that arise from this case: (i) context (previous dealing) matters—an emoji will simply be insufficient for complex contracts or where parties otherwise indicate how they want the contract completed; (ii) new directions for technology and contracts; (iii) evidential challenges of the case. The case interestingly brings to fore the intricacies of contracting is a hyper-fast world of internet and camera phones! Yet, the implications of the case must not be overstated.
The plaintiff, Southwest Terminal Ltd. (“SWT” or Plaintiff), brought this action for a summary judgment against the defendant, Achter Land & Cattle Ltd. (“Achter” or Defendant). The case of the plaintiff is relatively straight forward: SWT claims the parties entered a deferred delivery purchase contract (flax contract) on March 26, 2021, in which SWT agreed to buy and Achter agreed to deliver 87 metric tonnes of flax for a contracted price of $669.26 per tonne, with delivery between November 1st , 2021, and November 30th, 2021. Achter did not deliver any flax.
The plaintiff sues for breach of contract and damages of $82,200.21, plus interest and costs. The defendant denies entering the contract.2
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The facts of this case are not in dispute as the parties had previous dealing between them. SWT, a grain and crop inputs company, had purchased grain from Achter, a farming corporation owned and operated by Chris Achter, through various deferred grain contracts since approximately 2012. The uniqueness of this dispute arises from the use of the thumps up (👍) emoji.
On March 26, 2021, at 1:01 pm, Mr. Kent Mickleborough—a Farm Marketing Representative with the plaintiff—sent the following text message to producers, including Bob Achter and Chris Achter:
All Divisions – – Kent Mickleborough – Flax Prices: Flax 1Can (max 6% dockage) $22.50/bu Apr. $17.00 Oct/Nov/Dec del.
Bob Achter responded to Mr. Mickleborough’s text message with a call. After speaking with Bob Achter, Mr. Mickleborough called Chris Achter. After the phone call with Chris Achter, Mr. Mickleborough prepared a contract “for Achter to sell SWT 86 metric tonnes of flax to SWT for $17.00 per bushel” (which amounts to $669.26 per tonne) with a delivery period listed as “Nov.” Subsequently, Mr. Mickleborough—who primarily acts as a grain buyer for SWT—applied his printed signature to the contract, then took a photo of the contract using his cell phone and sent the contract photo to Chris Achter asking him to “Please confirm flax contract.” Chris Achter replied with a thumbs up (👍) emoji.
Achter did not deliver 87 metric tonnes of flax to SWT in November 2021. By November 30, 2021, the price had increased significantly—flax traded at $41.00 per bushel (which amounts to $1,614.09 per tonne).
Although four (4) issues were set out by the Plaintiff, we focus on the contract and evidential dimensions they raise, to wit, Whether the parties successfully completed a valid contract to deliver 87 tonnes of flax in November 2021 at the rate of $669.21 per tonne? More specifically: Was there a meeting of the minds? Was there certainty of terms?
The parties disagreed on whether there was a meeting of minds which is the basis of a contractual obligation. It is trite law that a contract is only formed where there is an offer by one party that is accepted by the other to create a legal relationship and supported by consideration.3 The test for determining when contractual obligation has crystallized is an objective theory of contract formation.4
Following the modern approach to finding agreement, courts are not restricted to the four corners of the purported agreement but can and have considered the surrounding circumstances of the case in arriving at a conclusion on the existence or otherwise of an enforceable contract.5 Likewise, the nature, relationship of the parties, and the interests at stake contribute to resolving the question of an intention to create a legal, contractual relationship.6
The previous trade practice between the parties was important in resolving this issue.7 The court found that Chris, the acting mind of the defendant, had a long-standing business relationship with SWT going back to at least 2015 when Mr. Mickleborough started with SWT as a grain buyer. The court reproduced an uncontested account of how the parties formed and executed previous contracts with each other. Following a review of these previous dealings, the Court found that the curt words such as “yup,” “looks good,” and “ok” were not simply an acknowledgment of receipt of the contract, but an affirmation of the content therein because supply of the grains ordered often followed such.
Turning to the agreement in dispute, the court found similarity in the way it was completed and the parties’ previous dealings. The only difference being the use of the word flax instead of the word durum; and this time instead of words like “ok,” “yup,” or “looks good” being texted by Chris—a commonly used “👍” emoji was texted by him. Chris contends that he did not agree with the terms of the Flax Contract as yet as they were to be followed by complete contract as he would not have entered into the contract without fully reviewing it.
According to the Court, a starting point is that the “👍” emoji has arrived in the world of dictionary meaning: “It is used to express assent, approval, or encouragement in digital communications, especially in western cultures.”8
In Keene J’s opinion, it would be somewhat self-serving to agree with Chris’ argument that the “👍” emoji is merely an acknowledgement of receipt of the contract. Chris responded to the offer to contract—Mr. Mickleborough called him because through Bob Achter (Chris’s father), Chris had expressed interest in a flax contract. There would be no other purpose for Mr. Mickleborough’s telephone call on March 26, 2021 to Chris. During that call Mr. Mickleborough and Chris talked about the Flax Contract, and just like in previous occasions with the durum contracts, a deal appears to have been at least verbally struck. This was followed up by Mr. Mickleborough sending a screenshot of the clearly titled “Deferred Delivery Production” contract indicating the product (flax), price, and the parties, just as they had done on numerous occasions before without any issues. Mr. Mickleborough added, “Please confirm flax contract”—just as he had done in the past, except the word flax instead of durum was used. Chris responded from his cell phone with a “👍” emoji.
The court preferred Mr. Mickleborough’s evidence that the terms had been discussed. The court accordingly refused Chris’ argument because the circumstances leading up to the conversation (multiple previous dealings) support Mr. Mickleborough’s recollection as he indeed sent the text of the contract offer shortly after the gentlemen ended their telephone call.
According to Greene J:
“I am satisfied on the balance of probabilities that Chris okayed or approved the contract just like he had done before, except this time he used a 👍 emoji. …, 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 a consensus ad item – a meeting of the minds – just like they had done on numerous other occasions.”
Also, the Saskatchewan Court was clear to develop a policy argument in not wanting to stem the tide of technology and common usage which increasingly is the new reality in Canadian society. Canadian courts will have to be ready to meet the new challenges that may arise from the use of emojis and the like. For the above reasons the court found that the parties entered into a binding legal contract under the unique circumstances of this case.
The Saskatchewan Court then turns to the defendant’s claim that the contract fails for lack certainty of terms. This claim was premised on two factors: first, that Mr. Mickleborough did not text a photo of the “General Terms and Conditions” found on the back of the flax contract to Chris, and second, the photograph of the flax contract texted to Chris stated the delivery period as “Nov.” Without the accompanying “General Terms and Conditions,” the agreement lacks essential terms and simply stating “Nov” is impermissibly vague.
The court rejected both propositions, while stating that the modern judicial approach to contractual interpretation directs the courts to consider the surrounding circumstances of the contract—often referred to as the factual matrix.9
In applying the law to the factual matrix in this application, the court held that the parties had a long-standing business relationship leading up to March 2021. Achter had entered into many deferred delivery purchase contracts with SWT leading up to March 26, 2021. The terms and conditions were set out repeatedly in these contracts. A reasonable, objective bystander aware of all of the previous contractual history would believe the same contract was being entered into: a deferred delivery production contract. The terms and conditions had never changed on the standard boilerplate reverse of the document. Chris received the front of the deferred delivery contract. The fact that he did not receive the reverse does not, in Greene J’s opinion, invalidate the contract for uncertainty. The reality of the situation informs the court that Chris would have known from the many previous contracts what the terms and conditions on the flax contract would be since the front page was clearly titled “Deferred Delivery Production Contract.”
In addition, the court also agreed with the plaintiff’s approach that even if the general terms and conditions are not part of the flax contract—the essential terms of the flax contract are contained in the first page of the contract that was texted to Chris and to which he confirmed. The question is whether the contract as presented disclosed the substance of the parties’ agreement. The agreement did convey with sufficient clarity the essential terms in agreement being the parties (SWT and Achter), the property (flax) and the price.
In the court’s view there were no missing or unascertainable essential terms in the flax contract—the parties, property and price were crystal clear. The court considered the “Nov” uncertainty argument a red herring, noting that the parties would have known, based on their previous dealings and the context in which the flax contract was discussed, this meant a November 2021 delivery date. The court thus found that there was no uncertainty as to the delivery date and the flax contract was not void for uncertainty. In this regard, the Saskatchewan Court followed several lines of authority in finding the intention of the parties rather than defeat the purpose of contracting.
We now turn to our analyses of the case. By way of analysis, we offer two sets of broad implications of the case from contractual and evidentiary points of view.
Analysis
i) Contractual Considerations: When it comes to “👍” emoji as a Legally Valid Expression of Consent—Context Matters
The contractual implications of this dispute affirm some long-standing principles of contracts in modern contexts. If one of the core social functions of contract law is its capacity to predict future economic relations between parties with clarity and certainty to avoid disputes as much as possible, then, the task of clarity in expression and communication of one’s intentions about the modus operandi for the completion of the agreement remains critical. Put differently, ambiguities are resolved against the party that created them. The dispute puts in sharp focus the sometimes-unconsidered implications of the use of electronic communications—emojis in particular—in simple contract situations.
When it comes to the “👍” emoji, we argue that its applicability depends on the context of the dispute. In fact, the use of “👍” emoji as a means of showing consent has been denied in some cases in the United States of America.10 We illustrate this argument with two instances. First, where parties have an established pattern of dealing, courts are more likely to interpret the subsequent actions of the parties in the light of their previous dealings to find a valid agreement to contract. This principle holds true especially in situations where the facts of the case are not contested, and no ambiguity has been established by the court. In this regard, this case can be distinguished from the US case of Lighthouse v Zinnex11 where the court held that there was no agreement based on a texted thumbs-up emoji because the previous text messages do not clearly support such a finding.
Second, a “👍” emoji is likely to be recognized as an expression of consent in scenarios that involve simple contracts as opposed to complex agreements. Simple contracts are more amendable to the informality at the heart of cases such as South West Terminal Ltd.12 By their nature, simple contracts do not require significant execution formalities to be enforceable. In their most basic contractual sense, they can be distinguished from contracts that require additional formalities, such as deeds or contracts under seal. Practically, complex commercial transactions—such as franchise agreements,13 forward sale agreements for gas among others—are not simple agreements for which the “👍” emoji would be sufficient to indicate an agreement to its terms. Further, ambiguity in interpretation, finding consent, or unresolved terms are more likely in complex commercial agreements. The formalization that follows these types of agreements excludes the likelihood that a “👍” emoji would be the basis of consent to the agreement. Suffice to note that the “👍” emoji may, however, indicate the parties’ agreement to a particular or narrow aspect of the contract.
In short, in as much as the case illustrates the evolving landscape of electronic communication and its impact on contract formation, the Saskatchewan Court was very modest in its interpretation and application of the “👍” emoji. Grounded in the Saskatchewan Electronic Information and Documents Act, 2000 (EIDA), which recognizes electronic forms of action as valid means of expressing acceptance, the “👍” emoji, being a recognizable electronic form of action, was interpreted correctly as signifying acceptance, as outlined in section 18 of the EIDA. Yet, we caution that the case should not be read beyond its narrow context specific application as the Court has done.
ii) Evidentiary Considerations: What Do Emojis Prove?
Perhaps unsurprisingly, this case received a great deal of attention from both Canadian and even international media.14 The headlines tended towards the simplistic, generally something along the lines of “Canadian court finds emoji sufficient to create contract,” or “Emoji costs Saskatchewan farmer thousands.” The engagement with the particular point of law varied as well, again not unexpectedly. The danger stemming from widespread public consumption of media coverage on cases is that the casual reader’s takeaway can be inaccurate, and worse, might distort or inflate expectations of and about both the law of contract and the law of evidence. Therefore, while this might seem a simplistic point, we are nonetheless moved to highlight key distinctions between what the court did and did not find.
The court did not find that a thumbs up emoji constitutes a valid acceptance of an offer in contract, nor did it find that an emoji more generally has this effect. What the court did find was that, in some circumstances, acceptance can be communicated via something other than an explicit response in the affirmative, such as “Further to your letter of X date, I accept the offer contained therein.” Here the evidence showed that in their ordinary practice, the parties were accustomed to the use of very short-form communication, such as “yup” and “okay,” to constitute valid acceptance. Formalities were not required. This is very much in accordance with the tenor of Canadian contract law, which emphasizes that courts should be reluctant to interfere with commercial relations and should give effect to commercial agreements where the parties can reasonably be found to have been ad idem on the important points.
The court also found that a thumbs up emoji can constitute valid acceptance, and that it did so in this case. But everything depended on that dreaded word, “context.” This required two bits of evidentiary analysis—the contractual dimension has been identified in the preceding section. First, what does “👍” even mean? The parties had apparently made fairly significant efforts to track different meanings that have been attributed to the emoji, but the judge resorted to judicial notice of a dictionary definition. This is a reasonable starting point, but a limiting one, as deeper research would have revealed an even broader array of possible meanings and potential complexity that could have supported or undermined either side of the argument.15
On this point we note that the judge did not fall into the trap of the “gee whiz, the internet presents all of these new issues” trope that infects some cases. From an evidentiary point of view, as Justice Paciocco reminded us a decade ago,16 the law of evidence shares the core beauty of the common law that spawned it: its basic principles are sound and can be adapted to most contexts without the need for generating new solutions to what appear to be new problems, but are just old problems with technological trappings. The problem with emojis is that, while they are popularly associated with certain meanings, one often cannot safely infer that one or any of these meanings is intended by someone who uses them. In our own personal experience, we have been “instructed” by our school-age children that we are using emojis “incorrectly”; a kissing-face emoji, for example, is appropriate as a way of conveying affection for a family member, but the same emoji that includes a heart apparently has romantic connotations. “It’s obvious, Dad,” we are told, and yet we know perfectly well that other people use these emojis differently.
However—and this is the rub—there is nothing truly new about this issue. Human beings communicate in ambiguous terms a lot of the time; they use words, expressions, idioms and phrases in ways that make sense to them but do not necessarily convey their intended meaning to the recipient. There are live controversies about what some words mean, and even where meaning is settled, there is an inherent subjectivity because of the intent of the speaker.17 Emojis fall precisely into this minefield, perhaps inevitably since they are not even expressive words but rather pictures that are meant to convey meaning; the meaning can be difficult to capture and more effort may be required in some cases, but the difference is a matter of degree and not quality.
This brings us to the second point of evidentiary analysis here: the court embarked on an effort to ascertain the meaning of the thumbs up emoji in the context of the relevant conversation and the associated behaviour of the parties. Context, in the end, was everything. By examining the history of contractual negotiations between the parties, the court was able to conclude that Chris regularly conveyed acceptance by way of a short-form text communication, made in response to a screenshot of the contract sent by Mr. Mickleborough, and after the parties had already reached a verbal agreement. It mattered, as well, that Mr. Mickleborough’s text also contained the usual language of offer between the parties, “Please confirm flax contract.” The thumbs up emoji was not the usual language of acceptance, but the judge was not convinced by the defence argument that on this occasion, for some reason, Chris would have been simply acknowledging receipt of the written agreement, rather than accepting it as he usually did.
Context, then, was the driver of meaning as regarded this particular communication. It was not enough to ask, “what do most people think this emoji means?” Because of the ambiguity of the use of the emoji, the query was rather, “What would a reasonable person think that this meant, in the context of this conversation, on this topic, between these two parties?” In some circumstances it would be entirely reasonable to find that a thumbs up emoji is simply meant to convey acknowledgment of receipt of a communication. In these circumstances it meant something more, but this was very much a result of the evidence.
Our final point flows from the previous one. For all the breathless reporting about how “an emoji can indicate acceptance in contract,” in terms of precedential value this decision really goes no further than that. Emojis, as we pointed out above, are inherently ambiguous and even less susceptible to having their meaning identified than regular language. The fact that the thumbs up emoji was held to have constituted valid acceptance in this case is likely to have little impact on the next case where the same emoji is used; the exercise is too context-laden and fact-specific for that.
That said, we feel that the judge here went down the proper analytical path by first assessing to the extent possible what the general conventional use of the emoji is meant to convey. This will nearly never, we think, be the only step required where emojis are used, since there are situations where people have their own idiosyncratic uses, and the context may shape this even further. However, it is a helpful first step in ascertaining what the party using the emoji meant by it, since people certainly do adopt popular uses. It also provides an assist in achieving one of the goals of contract law, certainty, so that one’s contracts are 😀 and not 😱.
- South West Terminal Ltd v Achter Land, 2023 SKKB 116.
- In the alternative or in addition, the defendant relies on the statutory defence found in s 6(1) of The Sale of Goods Act and contends that the contract is unenforceable because there was no note or memorandum of the contract made or signed by the parties. (We do not take this up in this review). See The Sale of Goods Act, RSS 1978, c S-1, s 6(1).
- Ethiopian Orthodox Tewahedo Church of Canada St Mary Cathedral v Aga, 2021 SCC 22 at para 35.
- Corner Brook (City) v Bailey, 2021 SCC 29.
- See Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53 [Sattva].
- See Saint John Tug Boat Co v Irving Refinery Ltd, 1964 CanLII 88 (SCC).
- Ibid.
- “👍 Thumbs Up emoji” (7 March 2018), online: <https://www.dictionary.com/e/emoji/thumbs-up-emoji/> [perma.cc/CW6K-DEAS].
- Sattva, supra note 5 at para 46.
- See Bardales v Lamothe, 423 F Supp (3d) 459 (MD Tenn 2019). For analysis by Eric Goldman, see Eric Goldman, “A Thumps-Up Emoji Doesn’t Mean That Dad Disavowed His Child–Bardales v. Lamothe” (31 October 2019), online (blog): <blog.ericgoldman.org/archives/2019/10/a-thumbs-up-emoji-doesnt-mean-that-dad-disavowed-his-child-bardales-v-lamothe.htm> [perma.cc/EVU3-6C7M]. As it was noted in a 2019 essay: “So far, the emoji and emoticons have rarely been important enough to sway the direction of a case, but as they become more common, the ambiguity in how emoji are displayed and what we interpret emoji to mean could become a larger issue for courts to contend with.” See Dami Lee, “Emoji are showing up in court cases exponentially, and courts aren’t prepared” (18 February 2019), online: <www.theverge.com/2019/2/18/18225231/emoji-emoticon-court-case-reference> [perma.cc/WM8N-Q535]. See also the more recent case of In Re Bed Bath & Beyond Corp Securities Litigation, 2023 US Dist LEXIS 129613 (DC 2023). See also the comment by Eric Goldman, “A Single Emoji Could Constitute Securities Fraud – In re Bed Bath & Beyond” (28 July 2023), online (blog): <blog.ericgoldman.org/archives/2023/07/a-single-emoji-could-constitute-securities-fraud-in-re-bed-bath-beyond.htm> [perma.cc/B6SH-7U98].
- Lightstone RE LLC v Zinntex LLC, 2022 NY Misc LEXIS 5925 (NY Sup Ct 2022). See also Eric Goldman, “A Million-Dollar Thmps-Up Emoji?–Lightsone v. Zinntex” (14 October 2022), online (blog): <blog.ericgoldman.org/archives/2022/10/a-million-dollar-thumbs-up-emoji-lightstone-v-zinntex.htm.> [perma.cc/M7PQ-2ZTQ].
- See Michael Ilg, “Thumbs Up, Bruh – Informality and the New Art of Contract Formation” (17 July 2023), online (blog): <ablawg.ca/wp-content/uploads/2023/07/Blog_MI_Thumbs_Up.pdf.> [perma.cc/973W-4228].
- See Bawitko Investments Ltd v Kernels Popcorn Ltd, [1991] CanLII 2734 (ONCA).
- See e.g. Nadine Yousif, “Farmer fined $61,000 for using thumps-up emoji,” BBC News (6 July 2023), online: <www.bbc.com/news/world-us-canada-66124775> [perma.cc/6G4S-YTSV]; Michael Levenson, “Canadian Court Rules 👍 Emoji Counts as a Contract Agreement,” The New York Times (7 July 2023), online: <www.nytimes.com/2023/07/07/world/canada/canada-thumbs-up-emoji-contract.html>; Prof Raphael Nyarkotey Obu & Daniel Sackey, “Emojis in Court as Evidence” (27 July 2023), online: <www.modernghana.com/news/1247764/emojis-in-court-as-evidence.html> [perma.cc/YJ6C-T4MK].
- For example, it is commonly held that there is some generational divide attached to emoji use, and the thumbs-up emoji has come under particular scrutiny. See Brooke Steinberg, “Gen Z wants you to stop using this particular emoji,” New York Post (26 October 2022), online: <nypost.com/2022/10/26/gen-z-has-hidden-meanings-for-emojis-beyond-rude-thumbs-up/> [perma.cc/NVN7-E58E].
- David Paciocco, “Proof and Progress: Coping With the Law of Evidence in a Technological Age” (2013) 11:2 CJLT 181, online: <ojs.library.dal.ca/CJLT/article/viewFile/6001/5335> [perma.cc/T8ZF-RWFS].
- See e.g. R v Foerster, 2017 BCCA 105, where a text message from a murder victim that she was being “creeped” was excluded because of the ambiguity of the term, even though there was some evidence from her boyfriend as to what she might have meant by it.