Can an Emoji Create a Legally Binding Contract? A Recent Saskatchewan Ruling Says Yes

Introduction

Emojis have become a universal part of digital communication, often used to express emotions, reactions, or quick acknowledgments. However, a recent decision by the Court of King’s Bench for Saskatchewan suggests that emojis can carry serious legal weight, potentially forming binding contractual agreements.

In South West Terminal Ltd. v. Achter Land & Cattle Ltd., 2023 SKKB 116, the court ruled that a  emoji sent in response to a contract offer constituted acceptance of the contract. As a result, the sender was held liable for breach of contract and ordered to pay damages. This case serves as an important reminder that digital symbols can have real-world legal consequences.

Case Overview: The Contract Formed by a Thumbs-Up Emoji

In this case, South West Terminal Ltd. (SWT), a grain buyer, sued Achter Land & Cattle Ltd. (Achter), a grain seller, after a contract for the sale of flax went unfulfilled. The dispute arose when SWT claimed that Achter had agreed to sell 87 metric tonnes of flax at $669.17 per tonne via a text message exchange but later failed to deliver.

Achter’s key defense was that the  emoji was meant only to acknowledge receipt of the contract, not to accept its terms. However, the court disagreed, ruling that within the context of the parties’ previous business interactions, the emoji indicated acceptance of the contract.

Background: How Did This Happen?

SWT and Achter had a history of conducting business through text message negotiations. Their usual practice was as follows:

1. The parties discussed contract terms over the phone.
2. SWT then sent a text message with a photo of the contract and a request for confirmation.
3. Achter had previously confirmed contracts using short replies such as “Looks good,” “OK,” and “Yup.”

On March 26, 2021, following a phone discussion about the sale of flax, SWT sent a text message with the contract photo, stating:
“Please confirm flax contract.”

Achter replied simply with a  emoji.

However, in November 2021, Achter failed to deliver the flax. SWT was forced to buy flax at a higher price on the spot market, incurring $82,000 in additional costs, which it sought to recover in court.

Court’s Decision: The Emoji Meant “Yes”

1. The Thumbs-Up Emoji as Contract Acceptance

The key issue in the case was whether the  emoji constituted a legally binding acceptance of the contract terms.

Justice Keene ruled that in the context of the parties’ past dealings, the emoji indicated assent to the contract, just as previous text message responses had. The judge cited the Dictionary.com definition of the emoji, which states that it is “used to express assent, approval, or encouragement in digital communications.”

2. Validity of an Electronic Signature

Achter also argued that the contract was not valid because it lacked a physical signature, as required under the Sale of Goods Act.

The court rejected this argument, citing the Electronic Information and Documents Act, which recognizes electronic signatures as valid if they:

• Identify the signatory
• Indicate approval of the document

Because the thumbs-up emoji was sent from Achter’s unique phone number, the court ruled that it met these requirements and functioned as an electronic signature.

3. Breach of Contract and Damages Awarded

The court found that a “meeting of the minds” had occurred and that a binding contract was formed. Since Achter failed to deliver the flax, it breached the contract and was ordered to pay $82,000 in damages—the cost difference between the agreed contract price and the market price SWT had to pay.

Legal Implications of the Ruling

1. Emojis Can Have Legal Consequences

This case highlights that courts will interpret emojis based on their ordinary meaning and the context in which they are used. If an emoji is commonly understood to mean “yes” or “I agree,” it may be legally interpreted as contract acceptance.

2. Electronic Signatures Are Broadly Defined

Canadian courts are increasingly recognizing digital forms of agreement, including emails, text messages, and even emojis. Businesses should be aware that electronic communications can create binding legal obligations, even without traditional ink signatures.

3. Industry-Specific Context Matters

Achter’s previous acceptance of contracts via short, informal replies (“OK,” “Yup”) played a major role in the court’s decision. This ruling suggests that what constitutes agreement may vary depending on industry norms and prior dealings between the parties.

Broader Impact on Digital Communication

1. Future Contract Disputes

The ruling sets a precedent for interpreting emojis in contract law. Businesses should be careful when using emojis in professional communications, as they may be legally binding in some contexts.

2. Similar Cases May Arise in Other Provinces

While this case was decided in Saskatchewan, its principles could influence courts across Canada. Businesses operating under provincial business laws should ensure that they have clear digital communication policies to avoid ambiguity.

3. Need for Clearer Contract Language

To prevent disputes, businesses should:

• Use explicit language when confirming contracts (e.g., “I accept the terms”).
• Require formal signatures for binding agreements.
• Establish clear policies on digital communications in contracts.

Conclusion

The South West Terminal Ltd. v. Achter Land & Cattle Ltd. case demonstrates that emojis can carry legal significance in business dealings. Courts may interpret them as expressions of agreement, particularly when parties have a history of conducting business informally.

This ruling is a wake-up call for businesses and individuals alike:

• Be cautious when using emojis in professional or contractual discussions.
• Recognize that digital communications may be legally binding.
• Implement clear policies to avoid disputes over text-based agreements.

As digital communication continues to evolve, we can expect more legal disputes involving emojis and other informal digital expressions. Businesses should take steps to ensure clarity and certainty in their contract negotiations.