Court finds thumbs up emoji formed legally binding contract

The Court of Appeal in Canada has recently resolved a dispute about the meaning of the thumbs up emoji, upholding the first instance decision by the King’s Bench for Saskatchewan. The dispute was between Achter Land & Cattle Ltd (‘the Farm’) and South West Terminal Ltd, a company that purchases crops and grain (‘the Buyer’).

The Farm had a history of entering into deferred delivery contracts with the Buyer, under which it agreed to supply a certain quantity of grain:  

• at a fixed price
• to an agreed location
• on a fixed date (typically a few months after the contract was agreed.

These contracts benefited the Farm by providing certainty about cashflow and protecting against the risk of falling grain prices. 

After enjoying a productive business relationship for several years, the parties fell out over whether the Farm had agreed to supply a shipment of flax. The facts of the case were as follows:

• The Buyer’s representative had signed a contract agreeing to buy a fixed quantity of flax at a rate of $17/bushel and texted a copy to the Farm along with the message ‘Please confirm flax contract’.
• The Farm’s representative replied with a thumbs up emoji.
• The Farm failed to deliver on the appointed date, by which time the market rate for flax had risen to $41/bushel. 

The question for the court was whether or not the Farm was contractually bound to deliver the flax. The Farm’s case was that the thumbs up emoji was simply intended as confirmation that he had received the contract. The Buyer’s case was that the farmer’s thumbs up signalled his agreement to the contract’s terms.

The court sided with the Buyer, deciding that a contract had been formed and ordering the Farm to pay $82,000 in damages. In doing so, it emphasised the parties’ history of contracting via informal text messages. On several previous occasion, the Buyer had texted the Farm photographs of signed purchase contracts together with the message “Please confirm terms of durum contract”. The farmer had texted back various succinct replies – eg “Looks good”, “Ok” and “Yup” – and then proceeded to deliver in accordance with the contract terms.

Based on the above facts, it is not surprising that the thumbs up emoji was interpreted as a sign of the Farm’s intention to be bound by the terms of the Buyer’s contract.    

Learning lessons

• Avoid agreeing contracts over informal channels such as text message and WhatsApp. There are numerous alternative methods of signing contracts which are equally efficient and leave less room for doubt about your intentions.  
• Create clear policies for your staff about approved methods for agreeing contracts and run training on how to apply those policies in practice.