Emotional damage: South West Terminal Ltd. V Achter Land, 2023 SKKB 116 (South West Terminal) – Contracts and Commercial Law

A recent case from Kings Bench Court in Saskatchewan, the second highest court in the province, ruled that the use of the “thumbs up” emoji on text messages could be closer to a valid signature reflecting acceptance of a contract.

As a result of a dispute between a Saskatchewan farmer and a crop purchasing company, the resulting order required the defendant seller—who was found to be in breach of contract by non-delivery of the goods—to pay the buyer $82,200.21 in damages. This case made headlines within and outside the Canadian legal community, as it highlighted the challenges courts face with the evolving trends of commercial participation in the modern digital economy.

Kent Mickleborough was an agent for South West Terminal Ltd. grain and crop inputs. (SW). Mr. Mickleborough, along with SW as a whole, had a long standing business relationship with Chris Achter, representative of the defendant seller Achter Land & Cattle Ltd. (Achter). In March of 2021, Mickleborough texted Ashter stating that his company was looking to buy 87 metric tons of flax at $17 a bushel (equivalent to $669.26 per ton), for delivery in November of 2021. Essentially, it’s like to Much like previous contract negotiations between the two, the parties agreed to a fixed price and grain size over the phone. At that point, Mickleborough drafted the contract with his signature attached and sent the contract to Achter’s usual cell phone number. The text read, “Please confirm the linen contract,” to which Akhter replied with a thumbs up emoji, giving Mickleborough the impression (from past practice) that Akhter had accepted the contract. However, when performance was due in November, Akhtar failed to deliver and the market price of flax soared to $41 a bushel (about $1,614 a ton), prompting a lawsuit.

In her subsequent defence, Achter asserted that Mr. Akhter only used the thumbs up emoji to convey his message receipt Contract. However, Chief Justice TJ Kane considered this to be “self-serving”, concluding: “.It is important to note that each time Kent would add to the contract offered “please confirm the terms of the solid contract” and Chris would do so succinctly by sending a brief “sounds good” or “okay” or “yes” text message. It was clearly understood by the parties that these blunt words were meant to confirm the contract and not merely to acknowledge receipt of the contract by Chris“.¹ as a result of, “……Any reasonable bystander who knows all the background would come to an objective understanding that the parties have reached a consensus The advertising element – the meeting of the minds – just as they have done on many other occasions“.²The Court recalled that, at bottom, the legal principles relating to the formation of contracts are simply: 1) the offer, 2) the acceptance of the offer, 3) the exchange of value, and 4) the intent to create legal, not social, obligations. The court then found that the thumbs-up emoji constituted an “electronic signature” under the boycott Electronic Documents and Information Act, 2000, SS 2000, C E-7.22.

the Southwest station The decision is particularly significant because despite the rise in so-called “emoji case law” in Western jurisdictions, Canadian jurisprudence has remained relatively silent on such cases. However, readers should understand that much remains to be determined as to its scope of application. In fact, Akhter’s lawyer asserted that a ruling in SW’s favor would “open the door wide” to allow all kinds of cases to seek interpretations of what the different emoji mean, and it remains to be seen how courts will continue to differentiate between different emoji and their different emoji. Nuance like these things. The Court seemed to widely acknowledge these challenges when it noted:This court readily admits that the emoji (thumbs up) is an unconventional means of “signing” a document, but nevertheless, under the circumstances, this was a valid way of conveying the two purposes of the “signature” – to identify the signatory (Chris uses his unique cell phone number ) And as I found above – say accept Akhtar to hold the linen“³. In other words, it appears that it was the consistent and longstanding conduct of the contracting parties – rather than the judicial expansion of what constitutes a contractual meeting of minds – that prompted Judge Kane’s decision to award damages. Therefore, anyone assuming that emoji now constitute contracts should proceed with extreme caution. On the flip side, because courts may now recognize such informal communications as acceptance of agreement, it is important to account for any ambiguity in potential emoji interpretation and to be explicit – even if informality and brevity are often the reason behind these forms of communication where they are made. Primarily text messaging.

footnotes

1.South West Terminal Ltd. v. Achter Land, 2023 SKKB 116in paragraph 21

2.Ibidin paragraph 36

3.Ibidin paragraph 63

The author would like to thank James Moskowski, summer law student, for his assistance with this blog.

The content of this article is intended to provide a general guide to the subject. It is advised to take the advice of specialists in such circumstances.

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