Thumbs Up!

Dominic Cantone

dominic.cantone@oracleis.com.au

Can a “thumbs up” emoji make a binding contract?

In June 2023, a Canadian Court, in the matter of South West Terminal Ltd v Achter Land & Cattle Ltd 2023 SKKB 116 found that a “thumbs up” emoji was capable of establishing a legally binding contract.

For context, since 2015, a grain buyer, South West Terminal (“South West”) and a farming corporation, Achter Land & Cattle Ltd (“Achter”), had engaged in regular business through their representatives, Mr Kent Mickleborough (for South West) and Mr Chris Achter (for Achter).

In March 2021, Mr Mickleborough and Mr Achter spoke on the phone, and agreed that Achter would sell a certain amount of flax to South West, and that Mr Mickleborough would draft a contract to reflect this agreement (as was common practice between the parties).

Mr Mickleborough then drafted and signed the contract for South West and sent a photo of the contract via phone to Mr Achter with the text “Please confirm flax contract”.  Mr Achter replied with a “thumbs up” emoji.

There was no further communication regarding this matter between the two parities, until however, Achter failed to make delivery. South West then proceeded to sue Achter for a breach of contact and damages.

Mr Achter argued however, that he hadn’t entered into a contract, and that the contract was unenforceable as there was no note or memorandum of the contract made or signed by the parties.  Mr Achter further argued that the “thumbs up” reply was merely a confirmation that he had received the contract and this was not acceptance to be bound by the contract.

In defence to these claims, Mr Mickleborough gave evidence that throughout the parities’ relationship of negotiating contracts, he would primarily discuss the key terms with Mr Achter verbally, and it was common for South West to finalise contacts with Achter via text message, with Mr Achter previously confirming contracts with text replies of “ok” and “looks good”.

The Court found that the deal was “ at least verbally struck” in the telephone call between the two men, and that the use of the “thumbs up” emoji within the context of the specific case would mean that  “a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus – a meeting of the minds – just like they had done on numerous other occasions.”

The Court rejected a public policy argument from Mr Achter, who argued that permitting a “thumbs up” emoji to signify acceptance would “open up the flood gates” for Courts to consider other forms of emojis as signs of acceptance, with the Judge noting that Courts need to be ready to meet the new challenges that arise with the common use of technology.

Generally, in Australian contract law, there is no particular form required for acceptance of an offer.  If, between the parties to a contract, a particular form of acceptance is made mandatory then, to be effective, acceptance must take this form and clear language must be used to stipulate that a form of acceptance is mandatory.  If, however, clear language is not used, then an equally fast and effective method of communication will usually be held to suffice.

Similar to Canadian contract law, Australian law will apply the objective test to what a reasonable person would regard to be the intention of the parties by making inferences from the parties’ conduct, which includes patterns of previous dealings, as the judge did in this case.