A Saskatchewan judge recently held that a thumbs-up emoji was enough to bind a farming corporation in a contract to supply flax. This conclusion likely comes as no terrible shock to subscribers who have read SPP IT 13.12 – Electronic Signatures in the Information and Technology database in PolicyPro. SPP IT 13.12 defines an electronic signature to include many forms, including sounds (for example, saying “I agree” or “yes” in response to a question) and text exchanges.
In South West Terminal Ltd. v Achter Land, 2023 SKKB 116, the judge described the specific issue of an emoji as a binding electronic signature as novel, at least in Saskatchewan. Nonetheless, he found that an emoji was an action in electronic form that can express acceptance as contemplated under The Electronic Information and Documents Act in Saskatchewan. Other Canadian jurisdictions have comparable statutes. As the judge put it, accepting the emoji for these purposes is responsive to the tide of technology, common usage, and the new reality in Canadian society.
Over many years, the parties entered into contracts for the sale of grain. Their pattern of behaviour for those contracts was that the buyer would send contract terms by text and ask the farm to confirm the terms. On each of those occasions, the farm would reply by text with “yup”, “ok”, “looks good”, or similar terms.
In 2021, the buyer texted the contract terms to the farm and requested confirmation. The farm responded with a thumbs-up emoji. However, the farm failed to supply the 87 metric tonnes of flax that it was to deliver at $669.26 under the contract. By the scheduled delivery date, the price of flax had increased to $1,614.09 per tonne. Having found that the farm failed to deliver the flax as agreed, the buyer was entitled to the price difference, which resulted in $82,200.21 in damages.
The farm claimed that the emoji meant only that it received the contract, not that it had reviewed or accepted it. The judge did not buy that explanation.
Meeting your duty of care
Implement written policies with contract negotiation and acceptance standards, including protocols for electronic signatures. Remember that a wet or handwritten signature, made directly on media without any electronic interventions, is not the only way to sign or accept a contract. Courts will examine your habitual business conduct and assess conduct objectively to assess whether you have accepted contract terms. See SPP IT 13.12 – Electronic Signatures and many other policies in Information Technology PolicyPro.
Policies and procedures are essential, but the work required to create and maintain them can seem daunting. The Finance and Accounting, Operations and Marketing, Not-for-Profit, and Information Technology databases in PolicyPro, co-marketed by First Reference and Chartered Professional Accountants Canada (CPA Canada), contain sample policies, procedures, checklists and other tools, plus authoritative commentary to save you time and effort in establishing and updating your internal controls and policies. Not a subscriber? Request free 30–day trials of Finance and Accounting, Not-for-Profit, Operations and Marketing, and Information Technology databases in PolicyPro here.
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