This article was prepared with the assistance of articling student Brian Wirachowsky.
A recent decision from the Saskatchewan Court of Appeal (the Court) affirmed that a “thumbs-up” emoji texted in response to a request for confirmation of a contract was sufficient to create a legally binding agreement.
On December 16, 2024, a majority of the Court denied a grain seller’s (the Seller) appeal, which would have overturned a finding that a thumbs-up (👍) emoji constitutes acceptance of a contract. Chief Justice Leurer wrote the reasons for the majority, with Justice Barrington-Foote writing a dissenting opinion.
The Court considered whether the King’s Bench Judge erred in finding that the parties had entered into a contract, whether the Judge erred in finding that the requirements for a “note or memorandum in writing” were met in the circumstances, and whether the contract was “signed by the party to be charged” as required by the Sales of Goods Act (SGA). The majority ultimately determined that no error had been made by the King’s Bench Judge.
The facts
After discussing and agreeing to a flax contract over the phone, a representative for a grain buyer (the Buyer) texted the representative for the Seller a photo of the flax contract on March 26, 2021, along with the text message: “Please confirm flax contract.” The Seller’s representative texted back a thumbs-up emoji, which the Buyer understood as the Seller’s acceptance of the contract. However, the Seller failed to deliver the flax.
Prior to the dispute, the parties had a longstanding business relationship. They had previously entered into several similar contracts in a similar manner, with a photo of the contract being texted to the Seller, which would then be accepted via text message. The Seller had always accepted those contracts by text message using short affirmative phrases such as: “Looks good,” “OK,” and “Yup.”
Accepting a contract
A contract is formed when there is an offer by one party accepted by the other with the intention of creating a legal relationship and supported by consideration. The Court accepted that these basic legal principles were properly applied by the Judge when he carefully analysed the evidence to conclude that a contract was formed. There was no error in his approach. However, the Court was careful to specify that a text message will not always constitute acceptance of a contract. Courts must engage in a contextual analysis to determine whether an objective, reasonable bystander would conclude that the parties had entered into a contractual agreement, which is what the Judge had done in this case.
A text conversation can constitute a note or memorandum in writing
The SGA requires that a contract be evidenced by some note or memorandum in writing to be enforceable in the Courts. Noting section 8 of the Electronic Information and Documents Act, which provides that records in electronic form meet the in-writing requirements at law, the Court held that the Judge did not err by determining that a text message conversation met the requirements of being “in writing.”
A text message sending a thumbs-up emoji can constitute a signature
The principle issue on appeal was whether the “note or memorandum in writing” evidencing the contract was “signed by the party to be charged,” as is required by the SGA. When analysing this issue, the majority noted that little is to be gained by fixating on the idea that a signature is synonymous with a handwritten name. The case law interpreting the signature requirement under the SGA takes a purposive approach to interpreting the signing requirement to prevent the section, intended to prevent fraud, from becoming an instrument for parties to avoid their legitimate obligations. The fundamental purpose of a signature is to link the person to the document and evidence their intention to be bound by the document.
In this case, the Majority accepted that the Judge properly identified that the thumbs-up emoji, coupled with the metadata identifying the sender of the message met both fundamental purposes of a signature. It identified the party and confirmed its assent to the contract. Thus, the text message, in the specific context of this case, met the signature requirements set out in section 6 of the SGA.
The dissent
Justice Barrington-Foote, writing in dissent, agreed that the parties had entered a contract and that there was a note or memorandum in writing. However, Justice Barrington-Foote rejected the notion that a text message containing a thumbs-up emoji sent in response to a request for confirmation of the contract could constitute a signature at law in the traditional sense of the word.
If you require assistance with commercial or litigation matters related to e-contracting, the lawyers in our Litigation, Innovation, Data & Technology and Corporate/Commercial groups would be happy to assist you. Contact us to learn more.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.
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