By Taylor Thiesen, Associate, Reynolds Mirth Richards & Farmer LLP
The Saskatchewan Court of King’s Bench recently ruled that a farmer’s use of a “👍” emoji could be treated as accepting a contract to deliver grain at a fixed price. This result might seem surprising, but it’s based on established principles of contract law.
Background
The plaintiff, South West Terminal Ltd. (“South West”), is a grain and crop inputs company. The defendant, Achter Land & Cattle Ltd. (“Achter Ltd.”), is a farming company owned by Chris Achter. These parties had a history of making agreements where Achter Ltd. would deliver various grain crops to South West at a set price per bushel. South West would send Mr. Achter a written contract via text message, asking for his confirmation, and he would usually respond with short messages like “Looks good,” “Ok,” or “Yup.” Then, he would proceed to deliver the grain according to the agreed terms.
In March 2021, South West offered to buy flax seed from Mr. Achter. They discussed the purchase by phone and agreed that South West would buy 87 metric tonnes of flax seed at $17 per bushel, with delivery scheduled for November. South West’s representative prepared the contract, signed it, sent a photo of it to Mr. Achter via text, and asked for confirmation. Mr. Achter replied with a single “👍” emoji.
However, when November came, the market price for flax seed had more than doubled, and Achter Ltd. did not deliver the flax seed. South West sued Achter Ltd. for the difference between the contract price and the market price in November 2021, totaling around $82,000.
Court Decision
In court, Achter Ltd. argued that there was no binding contract because Mr. Achter’s “👍” emoji merely acknowledged receipt of the contract and didn’t confirm acceptance.
The court disagreed with this argument. Instead, it looked at the parties’ past communications when they had discussed grain sales. In previous interactions, they had understood Mr. Achter’s brief replies as acceptance of the contract, not just acknowledgment of receipt. To determine if a contract was formed, the court assessed how a reasonable person, aware of their past dealings, would interpret the “👍” emoji. In this context, the court found that a reasonable person would see it as an agreement, similar to their previous agreements.
Additionally, the court considered whether the “👍” emoji met the requirements under Saskatchewan’s Sale of Goods Act, which says that for a contract for sale of goods over $50 to be legally binding, it must either be partially performed (goods partially delivered or payment partially made), or the parties must sign their acceptance of the written contract. The court concluded that the “👍” emoji effectively acted as Mr. Achter’s signature—similar to electronic signatures or clicking an “I Agree” button on an electronic document, which are accepted ways to sign contracts.
Takeaway
This case highlights the importance of using well-drafted and properly signed contracts. If South West had insisted on Mr. Achter signing a physical contract for the flax seed delivery at $17 per bushel, this case likely wouldn’t have gone to court, as Mr. Achter wouldn’t have had a valid defense.
At the same time, the case shows that parties usually can’t evade their contractual obligations by relying on questionable “loopholes” that go against the essence of the agreement. Typically, these attempts won’t hold up in court.
This supplied content is provided by Reynolds Mirth Richards & Farmer LLP.
