Written by Nick Noonan, JD, LLM
In Saskatchewan, a legal dispute arose that would capture the attention of business law scholars and practitioners – not to mention media – from around the world. This case offers a succinct yet insightful glimpse into the challenging questions facing the world of business law in Manitoba today. In South West Terminal Ltd. v. Achter Land, 2023 SKKB 116, South West Terminal Ltd., a grain and crop inputs company, had been in a commercial relationship with Achter Land & Cattle Ltd., a farming corporation, since 2012. The modus operandi for their transactions was straightforward: verbal negotiations followed by a written contract. However, the COVID-19 pandemic ushered in a new era of remote interactions, and by March 2020, the plaintiff’s sales team had ceased in-person meetings, opting for e-mail and text messages to finalize contracts. In March 2021, the plaintiff sought to purchase 87 tonnes of flax for delivery in November of the same year. A contract was drafted, photographed, and texted to the defendant with a request for confirmation. The defendant’s response was a thumbs-up emoji. When November rolled around, the flax was nowhere to be seen, prompting the plaintiff to sue for breach of contract, seeking damages of $82,200.21 plus interest and costs.
The issue before the court lay in the interpretation of the thumbs-up emoji. Was it a mere acknowledgment of receipt or a binding acceptance of the contract? The defendant also raised questions about the sufficiency of an emoji as a “signature” under s. 6 of The Sale of Goods Act (SGA) of Saskatchewan, which requires a written and signed memorandum for the enforceability of contracts exceeding $50 in value.
The court’s analysis was a thorough application of contract law principles to the digital age. The court employed the “reasonable person” test, examining whether the conduct of the parties would lead a reasonable person to conclude that they intended to be bound by the contract. The court considered the historical relationship between the parties, noting that they had entered into similar contracts in the past, often confirmed through text messages. The thumbs-up emoji, in this context, was not a mere acknowledgment but a digital handshake sealing the deal.
The court dismissed concerns about opening the floodgates to emoji interpretation cases, stating that the judiciary must adapt to technological advancements. Furthermore, the court found that the requirements of s. 6 of the SGA were met, as the emoji served the dual purpose of identifying the signatory and indicating acceptance, thereby rendering the contract enforceable.
For the business community, this decision is a harbinger of the evolving landscape of contract law in the digital age. The case underscores the legal weight that can be attached to digital forms of communication, including emojis. While the ongoing relationship between the parties in this case played a significant role in the court’s decision, the ruling serves as a reminder for all businesspeople. Digital interactions, even those as seemingly innocuous as a thumbs-up emoji, can have substantial legal ramifications. Businesspeople should exercise the same level of caution in their digital communications as they do in traditional written contracts. The decision also prompts a re-evaluation of what constitutes a “signature” in the modern age, expanding its scope beyond ink on paper to include digital affirmations. In a world where business transactions are increasingly conducted through screens, this case serves as a timely reminder that the law is not static; it evolves, much like the emojis that now find themselves subject to judicial scrutiny.
The views and opinions expressed in the blogs and case reporter are the views of their authors, and do not represent the views of the Desautels Centre for Private Enterprise and the Law, the Faculty of Law, or the University of Manitoba. Academic Members of the University of Manitoba are entitled to academic freedom in the context of a respectful working and learning environment.