When a thumbs up emoji means accepting an offer

In a time where communication increasingly takes place through text messages and social media platforms, the legal recognition of non-traditional expressions, such as emojis, presents a potential evolution of the doctrine of acceptance in contract law.  The 2023 Canadian decision by the Saskatchewan Court of King’s Bench (Court) in South West Terminal Ltd v Achter Land & Cattle Ltd [2023] SKKB 116 (SWT v Achter) has the potential of contributing to this evolution in Australia.  This article will discuss this case and its relevance to Australian law.

Background of SWT v Achter

South West Terminal Ltd (SWT), a grain purchaser, had a longstanding business relationship with Achter Land & Cattle Ltd (Achter).^[1]  In March 2021, following a phone conversation regarding the purchase of flax, SWT’s representative texted a photo of the signed contract to Achter along with a request to ‘please confirm flax contract’.  Achter responded with a thumbs-up emoji (👍).^[2]  SWT interpreted this response as acceptance and proceeded under the assumption that the emoji had inferred acceptance of their offer, resulting in the formation of a contract.  

Achter, however, later failed to deliver the grain, prompting SWT to sue for breach of contract.^[3]  Achter’s defence hinged on the argument that the emoji response was ambiguous and did not constitute a formal acceptance or a ‘signature’ under Canadian contract law.

Decision of the Court

The Judge found that a valid contract had been formed and that the parties had intended to accept the contract by way of thumbs up emoji.^[4]  The Court emphasised that the parties had a history of conducting business through informal communications and had consistently relied on brief confirmations to finalise agreements.^[5]  Thus, in this context, the thumbs-up emoji reasonably communicated acceptance.

The Court also had to consider whether the emoji constituted an electronic signature.  The Court relied on sections 3 and 18 of Saskatchewan’s Electronic Information and Documents Act 2000 (Canadian Electronic Act) which is identical to section 14 of the Electronic Transactions (Queensland) Act 2001 (Qld).  The provisions provide that an electronic signature can be any ‘electronic information’ in, attached to, or associated with an electronic document that the person intends to sign.^[6]  The Judge concluded that the emoji met this definition.^[7]

While emojis are an unconventional substitute for traditional handwritten or electronic signatures, they can still fulfil these two (2) key functions of signing a document: identifying the signing party and expressing agreement.  A critical factor supporting the decision in SWT v Achter was the metadata generated, transmitted, and stored in relation to Achter’s electronic message was consistent with the acceptance.  This metadata, showing the emoji’s origin, destination, and time of sending, was essential in verifying that it came from Achter’s mobile device.^[8]   Without this authentication, the message would likely not have been sufficient to bind the parties.  For this reason, electronic contractual acceptance is as verifiable and legally binding as a wet ink signature.^[9]

How is this relevant to Australian law?

While Australia lacks a directly analogous decision to date, the principles underpinning SWT v Achter are not foreign to Australian contract law, which is more concerned with conduct and intent of parties to an agreement rather than form.

Similar to the Canadian Electronic Act, the Electronic Transactions Act 1999 (Cth) (Electronic Transactions Act) also recognises that electronic signatures can be legally binding where intent is established and reliability criteria are met.  Section 10 of the Electronic Transactions Act provides that electronic communication may satisfy signature requirements if:

• there is a method used to identify the person and indicate their intention;
• the method is reliable or appropriate in the circumstances; and
• the recipient consents to that method.^[10]

An emoji could arguably meet these criteria if the context supports a conclusion that it was intended to communicate acceptance.  Just as the Canadian Court relied on the history between the parties, an Australian Court would likely consider the broader context of any agreement, including prior conduct, industry norms, and the parties’ expectations.^[11]  

Implications for Australian businesses

Even though the ruling in SWT v Achter is not binding on Australian Courts, it may be persuasive.  It is important for businesses entering into contracts on a regular basis to understand that an emoji can (in certain circumstances) constitute acceptance of an offer.  Whilst novel, SWT v Achter highlights the importance of clarity in communication, clear company-wide digital protocols and consistent contract formation practices.

Links

Legislation

Electronic Information and Documents Act 2000 (Saskatchewan)

Electronic Transactions Act 1999 (Cth)

Electronic Transactions (Queensland) Act 2001 (Qld)

Property Law Act 1974 (Qld)

Cases

South West Terminal Ltd v Achter Land & Cattle Ltd [2023] SKKB 116

Further information

If you need advice on contract drafting or clear communication in contracting, please contact us for a confidential and obligation-free discussion:

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

[1] South West Terminal Ltd v Achter Land & Cattle Ltd [2023] SKKB 116 at [19].

[2] South West Terminal Ltd v Achter Land & Cattle Ltd [2023] SKKB 116 at [15].

[3] South West Terminal Ltd v Achter Land & Cattle Ltd [2023] SKKB 116 at [15].

[4] South West Terminal Ltd v Achter Land & Cattle Ltd [2023] SKKB 116 at [31].

[5] South West Terminal Ltd v Achter Land & Cattle Ltd [2023] SKKB 116 at [21].

[6]  Electronic Information and Documents Act 2000 (Saskatchewan) ss 3, 18.

[7] South West Terminal Ltd v Achter Land & Cattle Ltd [2023] SKKB 116 at [63].

[8] South West Terminal Ltd v Achter Land & Cattle Ltd [2023] SKKB 116 at [62].

[9] South West Terminal Ltd v Achter Land & Cattle Ltd [2023] SKKB 116 at [59].

[10] Electronic Transactions Act 1999 (Cth) s 10.

[11] South West Terminal Ltd v Achter Land & Cattle Ltd [2023] SKKB 116 at [47].

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