Be wary of the emoji! 🤔

In the last few decades, we have seen a massive shift in the way people communicate with each other. Once it was commonplace to send correspondence by letters and facsimiles. Now emails and text messages are the norm.

Given this shift in communication, one thing to be aware of is that any communication can form a binding contract.

To form a contract, you need three essential elements. They are:

1.    An offer made by one party

2.    Acceptance of that offer by another party, and

3.    Consideration to be given by the parties (this can be in the form of paying money or even just promising to do something).

The most prominent example of a Contract is a contract entered into to buy land. The Buyer makes the Seller an offer to purchase the land for a certain price. The Seller accepts that offer (if the price is right) and finally, to make the contract binding, the Buyer pays the Seller a deposit and the Seller promises to sell the land to the Buyer (the consideration).

However, Contracts take many forms and aren’t necessarily written on paper. Another type of Contract that most people enter into on a daily basis is buying a cup of coffee. The customer offers to buy the coffee from the café. The café staff accept that offer and the customer pays for the coffee in exchange for the café providing the coffee to the customer (consideration). This is an example of a verbal contract.

With these different examples of contracts in mind, a contract in this day and age doesn’t necessarily look like a contract at first glance.

Recent Case

A recent case in Canada has highlighted this when the Court found that a contract was formed when someone replied to a text message by sending a 👍 ‘thumbs up’ emoji.

In this case (South West Terminal Ltd v. Achter Land & Cattle Ltd), a grain seller was sent a text message with an offer by the buyer to buy some grain. The grain seller replied with the thumbs up emoji to the buyer. The seller then didn’t deliver the grain and the buyer sued him for breach of contract. The Court found in favour of the buyer, deciding that the thumbs up emoji was sufficient for the seller to have accepted the buyer’s offer and bind the seller to the terms of the contract formed.

While it seems like a far-fetched outcome, the Court did rely on the previous conduct of the parties where they had entered several other contracts with each other by text messages where the seller would reply with ‘looks good’, ‘ok’ and ‘yup’ and then proceeded to deliver the grain to the buyer.

The Court found that the ‘thumbs up’ emoji indicated assent, approval or encouragement.

What further assisted the buyer’s case was that the seller didn’t follow up the buyer for further details of the deal or request a hard-copy of the contract to sign after the emoji was sent. It was the seller’s inaction after the thumbs up emoji was sent that made the buyer believe that the seller had accepted the buyer’s offer.

While Canada is half a world away, their legal system is closely linked to ours in Australia (with both Countries having their legal systems come from England). Even though our Courts are not bound to follow Court decisions in Canada, it is likely that they will be taken into consideration by the Australian courts for similar cases.

The case is an illustration of Courts adapting to the modern digital world and applying legal principles (such as contract law) to newer forms of communications including text messaging between parties.

The Takeaway

Be very careful when replying to your employees, contractors, suppliers or others by text message or email, especially if sending an emoji that can be construed as you accepting an offer.

To avoid any confusion, the best practice is to reply with something less ambiguous, such as “ok, let me take a look at that and I’ll come back to you” or “Can you send me a formal contract to peruse and I’ll consider” or even “thanks, I’ll get something drawn up and sent over to you to consider.”  Using phrases such as these will clearly show that you have not accepted any offer and the terms are still being negotiated.

When it comes to contracts dealing with land, the Property Law Act (Qld) provides the landowner with some protection in that a contract of sale needs to be in writing and signed by the seller to form a valid contract.  

The content of this column is to provide a general guide on this topic. Professional advice should be sought about your specific circumstances.