Contract formation: use of emoji showed objective intention to enter into contract

Achter Land & Cattle Ltd v South West Terminal Ltd, 2024 SKCA 115

The question

Is the use of a “thumbs up” 👍 emoji sufficient to convey acceptance when forming general commercial contracts?

The key takeaway

A Canadian court found that a party can he held to have approved a contract using a thumbs up emoji where, in the context of the complete factual matrix of the surrounding circumstances, the parties had displayed an objective intention to enter into a contract.

The background

Achter Land & Cattle Ltd (ALC) and South West Terminal Ltd (SWT) were in dispute as to whether they were parties to an enforceable agreement relating to the sale of grain. The putative contract was said by SWT to have been formed out of an exchange of two text messages. In the first, an employee of SWT sent to Chris Achter, of ALC, a picture of the front page of a proposed agreement with the accompanying words “Please confirm flax contract”. Mr Achter replied to that message with a thumbs up emoji but with no other accompanying words or symbols.

SWT brought proceedings to enforce the contract it says was formed by this exchange (which we previously reported on here). ALC’s position was that there was no agreement but, if one existed, it was unenforceable because of the Canadian Sale of Goods Act (CSGA) which provides that a contract for the sale of goods of the value of $50 or more “shall not be enforceable by action” unless there is part performance of it or “unless some note or memorandum in writing of the contract is made and signed by the party to be charged or his agent in that behalf”.

The decision

The critical issues for the Canadian Court of Appeal were whether:

• the parties had entered into a contract
• the exchanged text messages met the requirement for there to be “some note or memorandum in writing of the contract” within the meaning of the CSGA
• the text message with the thumbs up emoji met the requirement that a contract be “signed by the party to be charged or his agent” within the meaning of the CSGA
• This analysis focuses on point 1: had the parties entered into a contract?

Intent to contract

The Canadian Court of Appeal considered the lower court’s reasoning. The lower court had identified the test for agreement to contract under Canadian law, as “whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract”. It had examined the history of the parties’ dealings with each other, the circumstances surrounding their communications including the other instances where the contracts for the sale of grain had been entered into by them through the exchange of text messages and informal words (“looks good”, “ok” and “yup”), and their conduct after the date of the thumbs up emoji exchange.

The Court of Appeal did not agree with ALC’s arguments that Mr Achter had by use of the emoji only intended to communicate receipt of the agreement, or that there is inherent ambiguity in a thumbs up emoji. It reasoned that there was quite a difference between saying that a communication – whether it be by word, gesture or symbol – does not bear a universal meaning and, asserting that it is incapable of having a particular meaning ascribed to it in a specific circumstance. In this case the judge had been careful to consider only how an objective observer, who was aware of the relevant circumstances in this case, would interpret the text message and, in particular, if that observer would conclude that an agreement was intended and reached.

The Court of Appeal emphasised that it was important not just to focus on the words themselves but to consider the factual matrix and the surrounding circumstances to determine the meaning of the non-verbal, electronic communication of the kind at issue in the case. It concluded that the judge did not err in finding that ALC and SWT intended to enter into a contract when Mr. Achter replied to Mr. SWT employee’s texts with a thumbs up emoji.

Agreement on the essential terms of the contract

ALC argued that, even if a mutual intent to enter a binding agreement existed, the parties had failed to agree on the essential terms of the contract. An example was that the parties had stipulated delivery dates using the month “Nov” and not the year. Another was that the text message contained a photograph of only the face page of the two-sided contract form and not its reverse. These arguments were also unsuccessful.

The Court of Appeal determined the parties’ intentions based on the words they used in the context of the relevant circumstances surrounding the making of the contract. The parties’ previous dealings would lead them to understand that “Nov” referred to “Nov 2021” and previous contracts had repeatedly set out the same standard terms and conditions. The Court of Appeal found there had been agreement on the essential terms of the contract.

Another UK case of interest

In the UK, in Southeaster Maritime Ltd v Trafigura [2024] an issue was highlighted as to the effect of a message sent by WhatsApp. More widely, the case concerned whether or not the parties had concluded a charterparty agreement during negotiations. The judge in that case reasoned that just because a message came via WhatsApp it did not mean it should be disregarded or treated as less significant than a message sent by email.

Why is this important?

This Canadian case, non-binding in the UK of course, has attracted international attention and serves to show the considerations a UK court may take into account when considering whether use of a thumbs up emoji could amount to valid acceptance of a contract. These two cases also demonstrate the progression of the courts to accept more informal communications as being capable of forming binding contracts.

Any practical tips?

When conducting contract negotiations via text or WhatsApp ensure that in light of the circumstances surrounding the agreement, such as prior discussions and conduct relating to past contracts, informal language or an emoji is not being used in such a way as to inadvertently bind the parties to a contract.

Use of emojis (thumbs up, fist bump and handshake) have the potential to bring ambiguity to commercial contracts and communications. Where emojis are being used, it is important to ensure that the meaning of an emoji and its purpose is clearly understood by all parties.

Spring 2025