Dan Brecher
Counsel
212-286-0747 dbrecher@sh-law.comBe Careful With Your Emojis When Conducting Business Dealings
Author: Dan Brecher|July 18, 2023
Be Careful With Your Emojis When Conducting Business Dealings
Be Careful With Your Emojis When Conducting Business Dealings
Be Careful With Your Emojis When Conducting Business Dealings
Business communications have become increasingly informal in recent years. While we are not here to debate whether using emojis is appropriate when conducting business dealings, we will warn you that emojis can have unintended legal consequences.
A Canadian farmer recently learned this lesson the hard way in a lawsuit that is making headlines across the globe. According to the court, by responding with a thumbs-up emoji to a text message that contained a picture of a proposed contract, the farmer affirmed his consent to be bound by the terms of the contract.
Essentials of a Binding Contract
When communicating electronically via text or email, the basic principles of contract law still apply. In order for a business agreement to be enforceable, there must be a valid offer and acceptance, supported by consideration.
Accordingly, if one party responds to a contract sent via text message or email by proposing different terms, the offer is considered rejected. The contract formation process must then start anew. The parties must intend to be contractually bound. While intent need not be expressly conveyed in the electronic communication, it must be clear that the parties intended the agreement to be legally binding.
In analyzing the parties’ intentions, courts in both the United States and Canada generally apply the objective theory of contract formation, under which courts evaluate “how each party’s conduct would appear to a reasonable person in the position of the other party.” In other words, the key issue is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be legally bound by the terms stated in the proposed contract.
Thumbs-up Emoji Leads to Binding Contract
A recent Canadian case centered on whether, by responding with a thumbs-up emoji, farmer Chris Achter agreed to sell 87 metric tons of flax to a long-time business associate.
As detailed in court documents, South West Terminal Ltd. had purchased grain from Achter’s company, Achter Land & Cattle Ltd., through various deferred grain contracts since 2012.
On March 26, 2021, Kent Mickleborough, a Farm Marketing Representative with SWT, texted the following text message to producers, including Bob Achter and Chris Achter: “All Divisions – – Kent Mickleborough – Flax Prices: Flax 1Can(max 6% dockage) $22.50/bu Apr. $17.00 Oct/Nov/Dec del.”
After he sent the text message, Mickleborough spoke with both Bob and Chris Achter. Following these conversations, he had a contract drafted for Achter to sell SWT 86 metric tons of flax to SWT at a price of $17.00 per bushel with a delivery period listed as “Nov.” Mickleborough applied his ink signature to the contract, then took a photo of the contract using his cell phone. He then texted the photo of the contract to Chris Achter, along with the text message: “Please confirm flax contract.” Chris Achter texted back with a “thumbs-up” emoji. After Achter failed to deliver the flax in accordance with the contract, SWT filed suit.
According to Achter, he intended the emoji to simply convey that he had received the contract. However, the court concluded that the parties’ prior business dealings suggested otherwise. “This court readily acknowledges that a “thumbs up” emoji 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” – to identify the signator (Chris using his unique cell phone number) and as I have found above – to convey Achter’s acceptance of the flax contract,” Justice T. J. Keene wrote.
In support of his decision, Justice Keene cited the dictionary.com definition of the thumbs-up emoji. It states that the emoji is “used to express assent, approval or encouragement in digital communications, especially in Western cultures.”
Justice Keene also noted that the texting of a contract and then the seeking and receipt of approval was consistent with the previous process between SWT and Achter to enter into grain contracts. On several prior occasions, Mickleborough had texted Achter grain contracts, and Achter had responded by texting “looks good,” “ok” or “yup.” In such cases, Achter delivered the flax in accordance with the terms of the contract, confirming that both parties understood that these short responses were “not a mere acknowledgment of the receipt of the contract.”
Tips for Conducting Contract Negotiations Via Text Message
To avoid a costly breach of contract lawsuit, below are five tips for negotiating a contract via text message, email, or other form of electronic communication:
- Expressly convey your intentions. A court will analyze what you said, not your subjective intentions when evaluating whether a valid contract has been formed. Therefore, you should memorialize everything in writing.
- Put the other party on notice. If you do not want to be bound by the terms discussed via text or email, make it clear to the other party that your electronic correspondence should be considered non-binding and that any agreement is contingent upon the execution of a physically executed, formal written contract.
- Clear up any confusion. If you suspect that the other party may be interpreting your email exchange as the basis for a binding contract, you should take swift action in writing to correct any misconceptions.
- Be mindful of accidental contract amendment. Texts and emails can also amend the terms of an existing agreement. Therefore, it is important to be equally mindful that you do not unknowingly waive or modify an important contract term via electronic correspondence.
- Train your employees. Make sure your employees understand the risks of negotiating via electronic correspondence, including the unintentional formation of a binding agreement.
Key Takeaway
Not every use of a thumbs-up emoji will have legal consequences. However, this recent court decision highlights that if a reasonable person would interpret a text or email exchange involving emojis to represent a binding offer and acceptance, it may be sufficient to trigger a finding that an enforceable contract has been made.
Be Careful With Your Emojis When Conducting Business Dealings
Author: Dan Brecher
Business communications have become increasingly informal in recent years. While we are not here to debate whether using emojis is appropriate when conducting business dealings, we will warn you that emojis can have unintended legal consequences.
A Canadian farmer recently learned this lesson the hard way in a lawsuit that is making headlines across the globe. According to the court, by responding with a thumbs-up emoji to a text message that contained a picture of a proposed contract, the farmer affirmed his consent to be bound by the terms of the contract.
Essentials of a Binding Contract
When communicating electronically via text or email, the basic principles of contract law still apply. In order for a business agreement to be enforceable, there must be a valid offer and acceptance, supported by consideration.
Accordingly, if one party responds to a contract sent via text message or email by proposing different terms, the offer is considered rejected. The contract formation process must then start anew. The parties must intend to be contractually bound. While intent need not be expressly conveyed in the electronic communication, it must be clear that the parties intended the agreement to be legally binding.
In analyzing the parties’ intentions, courts in both the United States and Canada generally apply the objective theory of contract formation, under which courts evaluate “how each party’s conduct would appear to a reasonable person in the position of the other party.” In other words, the key issue is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be legally bound by the terms stated in the proposed contract.
Thumbs-up Emoji Leads to Binding Contract
A recent Canadian case centered on whether, by responding with a thumbs-up emoji, farmer Chris Achter agreed to sell 87 metric tons of flax to a long-time business associate.
As detailed in court documents, South West Terminal Ltd. had purchased grain from Achter’s company, Achter Land & Cattle Ltd., through various deferred grain contracts since 2012.
On March 26, 2021, Kent Mickleborough, a Farm Marketing Representative with SWT, texted the following text message to producers, including Bob Achter and Chris Achter: “All Divisions – – Kent Mickleborough – Flax Prices: Flax 1Can(max 6% dockage) $22.50/bu Apr. $17.00 Oct/Nov/Dec del.”
After he sent the text message, Mickleborough spoke with both Bob and Chris Achter. Following these conversations, he had a contract drafted for Achter to sell SWT 86 metric tons of flax to SWT at a price of $17.00 per bushel with a delivery period listed as “Nov.” Mickleborough applied his ink signature to the contract, then took a photo of the contract using his cell phone. He then texted the photo of the contract to Chris Achter, along with the text message: “Please confirm flax contract.” Chris Achter texted back with a “thumbs-up” emoji. After Achter failed to deliver the flax in accordance with the contract, SWT filed suit.
According to Achter, he intended the emoji to simply convey that he had received the contract. However, the court concluded that the parties’ prior business dealings suggested otherwise. “This court readily acknowledges that a “thumbs up” emoji 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” – to identify the signator (Chris using his unique cell phone number) and as I have found above – to convey Achter’s acceptance of the flax contract,” Justice T. J. Keene wrote.
In support of his decision, Justice Keene cited the dictionary.com definition of the thumbs-up emoji. It states that the emoji is “used to express assent, approval or encouragement in digital communications, especially in Western cultures.”
Justice Keene also noted that the texting of a contract and then the seeking and receipt of approval was consistent with the previous process between SWT and Achter to enter into grain contracts. On several prior occasions, Mickleborough had texted Achter grain contracts, and Achter had responded by texting “looks good,” “ok” or “yup.” In such cases, Achter delivered the flax in accordance with the terms of the contract, confirming that both parties understood that these short responses were “not a mere acknowledgment of the receipt of the contract.”
Tips for Conducting Contract Negotiations Via Text Message
To avoid a costly breach of contract lawsuit, below are five tips for negotiating a contract via text message, email, or other form of electronic communication:
- Expressly convey your intentions. A court will analyze what you said, not your subjective intentions when evaluating whether a valid contract has been formed. Therefore, you should memorialize everything in writing.
- Put the other party on notice. If you do not want to be bound by the terms discussed via text or email, make it clear to the other party that your electronic correspondence should be considered non-binding and that any agreement is contingent upon the execution of a physically executed, formal written contract.
- Clear up any confusion. If you suspect that the other party may be interpreting your email exchange as the basis for a binding contract, you should take swift action in writing to correct any misconceptions.
- Be mindful of accidental contract amendment. Texts and emails can also amend the terms of an existing agreement. Therefore, it is important to be equally mindful that you do not unknowingly waive or modify an important contract term via electronic correspondence.
- Train your employees. Make sure your employees understand the risks of negotiating via electronic correspondence, including the unintentional formation of a binding agreement.
Key Takeaway
Not every use of a thumbs-up emoji will have legal consequences. However, this recent court decision highlights that if a reasonable person would interpret a text or email exchange involving emojis to represent a binding offer and acceptance, it may be sufficient to trigger a finding that an enforceable contract has been made.
