PERMANENT THUMBS UP
BY NEIL TOWNSEND
Text message is a common form of communication between farmers and grain buyers. In June, a Saskatchewan court ruled an emoji is valid as a signature in the formation of a contract. For failure to fulfil a contract made by text message, a farmer was ordered to pay more than $80,000.
In this case, the buyer had sent a mass text message in March 2021 offering to buy 86 tonnes of flax for delivery in November of that year. The buyer spoke with the prospective seller by phone. The buyer texted a contract to the seller and requested, “please confirm flax contract.” The farmer responded with a 👍 emoji. Come November, the farmer didn’t deliver the flax. Meanwhile, flax prices had risen, creating a loss for the buyer. The buyer acted against the seller for breach of contract. The key question was whether a thumbs up emoji constitutes acceptance of the offer to buy.
Contracts are the core of business, an agreement between parties that creates a legal obligation to take an action or avoid doing so. They are formed through a process of offer and acceptance. In most of the English-speaking world, contracts are dictated by common law. Common law is established by precedent, which is derived from previous disputes resolved in court. In Canada, many of the leading precedents were set in England.
Cited as its founding document, common law has naturally evolved since the Magna Carta was established in England in 1215. For more than 800 years, judges have had to keep up with advancements in communication technology. Mail has been a constant, but its delivery sped up from horse to train to plane. Communications technology likewise evolved with the telegraph, telephone, pager, email and smartphone.
The legal system has also had to adapt to changes in language and behaviour as well as the erosion of formality and reaction against established norms. Yet, contractual obligation remains a serious matter, and disputes may well end up in court. Why can’t the courts be more chill, you may ask. Canadian or common law-based systems cannot exist without the structure precedent provides. The law will continue to evolve long beyond the lifespan of the parties involved in any one case. No one would enter a contract if they lacked confidence in the law and judicial decision-making.
In this case, the court looked at practice and custom within the grain trade. First, text messaging is now a standard way to conduct business. Second, language has evolved. People use emojis to communicate, not exclusively for fun. In fact, the court ruled that it “cannot (nor should it) attempt to stem the tide of technology and common usage” of emojis. The judge wrote, “This court readily acknowledges that a 👍 is a non-traditional means to ‘sign’ a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a ‘signature.’” Herein lies the precedent. This non-traditional means is now embedded in jurisprudence that can be referred to in future cases. In other words, the use of 👍 has now entered the common law.
Contracts reach the dispute stage for a variety of reasons. In this case, had the flax price dropped rather than increased, would the plaintiff and respondent have switched position? Maybe. The broader takeaway is that your business is important. The courts have now changed what constitutes a “yes.” So, when you take a contract, remember that a yes may take many forms. Got it? 👍
Neil Townsend is chief market analyst with FarmLink Marketing Solutions.
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