Canadian appeals court to rule on the validity of emojis as signatures

(CN) — An appeals court in Regina, Saskatchewan, took up arguments on Tuesday on whether a Canadian judge correctly ruled that a thumbs-up emoji can act as a legally binding signature for electronic contracts.

In June 2023, Justice T.J. Keene of the Court of King’s Bench for Saskatchewan awarded $82,000 to a grain and crop input company — South West Terminal — after finding that South West had an enforceable deferred delivery contract with farming company Achter Land & Cattle in 2021.

The contract from Mar. 26, 2021, involved a text message thread between South West grain buyer Kent Mickleborough and Achter Land’s owner, Chris Achter. In that exchange, Mickleborough texted a photo of the purchasing contract for 86 metric tons of flax grains that would be delivered in November 2021.

Mickleborough texted Achter, “Please confirm flax contract.” Achter responded with a thumbs-up emoji.

But unlike South West’s previous purchases from Achter Land, the $58,000 order of flax grains never arrived. At the time of its expected delivery, the same order of flax grains had skyrocketed to a value of $139,000.

South West contended that it expected its delivery because its previous purchasing arrangements with Achter followed a similar pattern where he would respond to texted contracts with “looks good,” “ok” or “yup.” Achter, on the other hand, argued that he never signed anything, and that the emoji merely confirmed that he received the contract for further review.

In his ruling, Keene disagreed with Achter’s take, ruling that any reasonable bystander would have believed that a contract existed and that the emoji — sent from Achter’s phone — represented a legally valid signature.

“In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it,” Keene wrote in his 2023 order. “In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item — a meeting of the minds — just like they had done on numerous other occasions.”

Keene also noted that Achter didn’t follow up with South West to discuss the contract further besides a brief conversation about possible crop failure in September 2021.

“Chris would have the court believe that during the crop growing season he believed there was no flax contract with SWT,” Keene wrote.

On Tuesday, Achter’s lawyer, Jean-Pierre Jordaan, pushed back on Keene’s decision before the Court of Appeal for Saskatchewan, arguing that an emoji cannot be a valid signature in a contract because it lacks explicit intent and a clear indication of an agreement.

Jordaan also contested the idea that the previous text agreements had been formal contracts at all, explaining that Achter only used texts for Mickleborough’s orders after 2020 because he bought a new phone that lacked the signature format he previously used for formal contracts.

Additionally, Jordaan argued that Achter did not believe South West’s inquiry had been a deferred delivery purchase but a production contract for flax grains that were yet to be harvested.

In previous contracts, Jordaan explained that South West indicated which of Achter’s grain bins it would purchase from. This was not the case with South West’s 2021 order, Jordaan noted, further arguing that Achter never agrees to production contracts without a liability clause to protect him from circumstances outside of his control.

Toronto-based company Syngrafi intervened in the appeal to emphasize the importance of attaching electronic signatures to documents to meet legal requirements. In turn, South West lawyer Johsua Morrison defended Keene’s order extensively, arguing that the Sale of Goods Act recognizes text messages and voice messages as signatures and — despite the lack of a traditional contract — that the text thread constituted a contract with Achter’s emoji as an affirmative response.

Chief Justice Robert W. Leurer, joined on the panel by Justices Neal W. Caldwell and Brian A. Barrington-Foote, concluded the hearing by stating that they would issue a ruling in due course. However the panel rules, counsel from the opposing parties indicated that the case will have major implications for contract law moving forward.

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