TECHNOLOGY
Texas Bar Journal • November 2023
Negotiating a Contract
A thumbs-up emoji can seal a deal.
Written by Pierre Grosdidier
In South West Terminal Ltd. v Achter Land & Cattle Ltd., the Saskatchewan Court of King’s Bench, a trial court in that Canadian province, held on summary judgment that a thumbs-up emoji in response to a flax purchase offer in a text message functioned as an acceptance.1 The court awarded the frustrated buyer $82,200.21 in Canadian dollars in damages, which was the difference between the cover price and the contract price of the flax in a direct application of Section 50 of the Sales of Goods Act.2
The parties, a grain buyer and a grain grower and seller, had successfully performed various deferred delivery grain contracts for years. A deferred delivery contract sets the volume, price, and date of delivery of grain—whatever its source—unlike a production contract, which is tied to a specific crop to be grown. The parties had developed a practice of closing contracts electronically during the pandemic after discussing the terms on the phone. The buyer would draft and physically sign a contract after a verbal agreement, snap a picture of the contract with his cellphone, and text it to the seller, who variously responded by crisply texting back “Looks good,” “Ok,” or “Yup.” Each time, the seller delivered the grain per the agreed terms.3 In March 2021, the parties agreed by phone to transact 86 metric tonnes of flax deliverable in November in a deferred delivery contract. The buyer texted the seller a picture of a signed contract conspicuously labeled “Deferred Delivery Production” with a request for confirmation. The seller answered with a thumbs-up emoji but failed to deliver the flax that November.4 Reviewing the four corners of the alleged contract and the surrounding circumstances, the court held that the parties had reached a meeting of the minds from the perspective of an objective reasonable bystander.
The seller argued that the parties’ prior contracts all dealt with grain on hand, amenable to deferred delivery contracts because the risk was low. If the crop was not on hand but contingent on the outcome of the growing season, as in this case, the seller insisted on a production contract with an Act of God clause to protect him against the risks inherent to growing crops. The seller claimed his thumbs-up emoji was just an acknowledgment that he received the contract, which he intended to review later, after he was freed from calving hundreds of cows, to confirm the presence of an Act of God clause. But significantly, the seller never mentioned a production contract to the buyer.5
The court was satisfied that it could resolve the issue on summary judgment. Citing the online site Dictionary.com, it noted that a thumbs-up emoji “express[ed] assent, approval or encouragement in digital communications.” It also opined that the seller seemed to espouse “a bit of a cake and eat it too situation” by arguing that his thumbs-up emoji signified acquiescence that he received the contract, but not that he agreed to its terms. It found that a reasonable bystander, viewing the multiple similar previous transactions, would objectively conclude that the parties had again reached consensus ad item (a meeting of the minds), and that the thumbs-up emoji indicated an acceptance of the contract, not the seller’s mere acknowledgment of its reception.6
The court also found that the thumbs-up emoji satisfied Canada’s Electronic Information and Documents Act, whereby acceptance of a contract “may be expressed . . . by an action in an electronic form, including . . . communicating electronically in a manner that is intended to express the offer, acceptance or other matter.”7 It also rejected the seller’s argument that the contract failed for certainty of terms because the texted contract page defined the parties, the property, and the price.8 TBJ
PIERRE
GROSDIDIER is a litigation attorney in Houston. He is certified
in construction law by the Texas Board of Legal Specialization.
Grosdidier’s practice also includes data privacy and unauthorized
computer access issues and litigation. Prior to practicing law, he
worked in the process control industry. Grosdidier holds a Ph.D. from
Caltech and a
J.D. from the University of Texas. He is a member of the State Bar of
Texas, an AAA panelist, a registered P.E. in Texas (inactive), a member
of the Texas Bar Foundation, a fellow of the American Bar Foundation,
and the past chair (2022-2023) of the State Bar of Texas Computer &
Technology Section. Grosdidier was elected medium-sized section
representative to the State Bar of Texas Board of Directors for the
2023-2026 term.
