Canadian Judges give Contract the Thumbs Up

In a recent decision of the Canadian Court of Appeal of Saskatchewan in South West Terminal Ltd v Achter Land and Cattle Ltd [2024] SKCA 115 it was held that a ‘thumbs up’ emoji in a text was a valid electronic signature to a contract. A Saskatchewan farmer who text-messaged a “thumbs-up” emoji in response to an offer to buy his flax. The lower court found that the seller’s thumbs-up emoji constituted assent to the buyer’s offer and awarded the buyer $82k (Canadian) in damages. On appeal, the Saskatchewan Court of Appeals affirmed the decision 2-1. It may be noted from this decision the objective theory of contract, operative in Australia, also constitutes the law of Canada. On 10 February 2025, an application for leave to appeal was filed in the registry of the Supreme Court of Canada.

The Court of Appeal set out the relevant facts as follows:

[12] On March 26, 2021, Mr. Mickleborough sent a text message to producers with whom he was then dealing. Mr. Mickleborough’s text message stated:

All Divisions – – Kent Mickleborough – Flax Prices: Flax 1 Can (max 6% dockage) $22.50/bu Apr. $17.00 Oct/Nov/Dec del

[13] The text message amounted to an invitation to treat to producers indicating that “SWT would pay $17 per bushel for flax with a maximum of 6% dockage and with a delivery period of between September and November 2021”. In this context, dockage refers to any undesirable material intermixed with a quantity of grain.

[14] Shortly after Mr. Mickleborough sent this text message, he spoke separately with both Mr. Achter and Mr. Achter’s father. Mr. Mickleborough’s evidence was that, in his discussion with Mr. Achter, he reached a verbal agreement for the sale of flax, and that he had told Mr. Achter that he “would write up the contract and send it to [Mr. Achter] by text message”. The parties agree that, after the call between Mr. Mickleborough and Mr. Achter, Mr. Mickleborough “had a contract drafted for [ALC] to sell SWT 87 metric tonnes of flax to SWT [sic] at a price of $17.00 per bushel (which amounts to $669.26 per tonne) with a delivery period listed as ‘Nov’”. Mr. Mickleborough also says that he asked Mr. Achter “to confirm the contract via text when it came through, which [Mr. Achter] agreed to do”. Mr. Achter acknowledges that he spoke with Mr. Mickleborough but denies that he agreed to the terms of a contract.

[15] The document Mr. Mickleborough prepared was in SWT’s standard form of “Deferred Delivery Purchase Contract” which, as mentioned, had been used in the previous transactions between the two companies. As noted, the front page of Mr. Mickleborough’s draft contract identified that ALC would sell 87 metric tonnes of flax to SWT at a price of $17.00 per bushel with a delivery period listed as “Nov”.

[16] Mr. Mickleborough applied his manuscript, or “wet ink”, signature, as SWT’s representative, on the front page of the contract he had prepared. After he had done this, Mr. Mickleborough took a photograph of the front of the double-sided document using his cellphone. Mr. Mickleborough then sent this photograph via text message to Mr. Achter’s personal cellphone number. Accompanying the photograph was the message “Please confirm flax contract”. Mr. Mickleborough did not text a photograph of the back page of the contract to Mr. Achter.

[17] Mr. Achter received Mr. Mickleborough’s text message, with the photograph of the front page of contract and the request that he “confirm flax contract”, on his cellphone. He replied with a text message that contained only a thumbs up emoji. It had no accompanying text. Although the printed copy of the text message contained in the appeal record does not show this, ALC agreed in its factum that the information Mr. Mickleborough received back from Mr. Achter in the reply text message included “the Emoji and Mr. Achter’s cellphone number and other identifying information (metadata)”.

The Court considered applicable legal principles:

[41] A contract is formed where there is “an offer by one party accepted by the other with the intention of creating a legal relationship, and supported by consideration” (Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v Aga, 2021 SCC 22 at para 35, [2021] 1 SCR 868 [Aga], citing Scotsburn Co‑operative Services Ltd. v W.T. Goodwin Ltd., 1985 CanLII 57 (SCC), [1985] 1 SCR 54 at 63).

[42] The judge emphasized that the inquiry into whether the parties had intended to form a contract is focused not on the parties’ subjective intentions but rather on how their words and actions would be viewed to an objective outside observer. The judge referred to Aga and then provided the following summary of the law:

[18] … The test for agreement to a contract for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract (Aga at para 36). The question 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 bound (Aga at para 37). …

[43] After establishing this basic legal framework, the judge conducted a careful review of the evidence pertaining to the history of the parties’ dealings with each other prior to March of 2021, the circumstances surrounding the March 26, 2021, communications, as well as the parties’ conduct after that date. He then concluded that, when considering all of the circumstances, the sending by Mr. Achter of the thumbs up emoji “meant approval of the flax contract and not simply that he had received the contract and was going to think about it” and that “a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad idem – a meeting of the minds – just like they had done on numerous other occasions” (at para 36).

The Court had this to say about communication by emoji:

[47] Given the absence of an extricable error of law underpinning the judge’s finding that a contract was formed, ALC is left to argue that the judge’s conclusion – that, from an objective perspective, the parties had intended to enter into a contract – is palpably wrong as fact. In this regard, ALC asserts that Mr. Achter “never intended to convey acceptance of the agreement by sending the [thumbs up] emoji but merely intended to communicate receipt of the agreement”. In advancing this argument, ALC submits that there is inherent ambiguity in a thumbs up emoji. It emphasizes that the common meaning of the thumbs up emoji is not simply to convey acceptance. In its factum, it quotes the following passage from the online dictionary, Dictionary.com:

The thumbs up emoji also frequently punctuates text, sometimes in strings for additional emphasis, to indicate positivity, agreement, approval, encouragement, or assurance, an equivalent to “Awesome!” or Great job!”. Someone might comment “That looks great!?” to celebrate a piece of online artwork. Another person might post “Please subscribe to my channel if you like my content!?” to solicit support or to say thanks. As with much of language, the thumbs up emoji can also be used sarcastically: “Way to ruin the party?.”

In relation to the parties’ history of contractual dealing the Court reasoned:

[50] The judge would have committed error had he approached his decision by suggesting that a thumbs up emoji invariably means “I agree” or always bears something akin to that meaning. But he did not do that. Rather, the judge was careful to consider only how an objective observer, who was aware of the relevant circumstances in this case, would interpret the text message and, in particular, if that observer would conclude that an agreement was intended and reached. In doing so, the judge reviewed the evidence of the history of the parties’ commercial dealings with each other, including the other instances where the contracts for the sale of grain had been entered into by them through the exchange of text messages between Mr. Mickleborough and Mr. Achter before and subsequent toMarch of 2021.

[51] In this regard, on July 14, 2020, after discussing and agreeing on a contract with Mr. Achter, Mr. Mickleborough prepared a deferred delivery contract for the sale of a prescribed quantity of durum wheat for a specified price. Mr. Mickleborough manually signed that contract and took a photograph of the first page of it using his cellphone. He then sent the photograph via text to Mr. Achter together with the message, “Please confirm terms of durum contract”. Mr. Achter texted back that it “Looks good” and “I haven’t been back to the house, and I can’t figure out how to sign on my new phone”. A similar set of events occurred on September 11, 2020, and again on October 21, 2020. Mr. Mickleborough’s September 11, 2020, text contained a photograph of the first page of the contract and the message “Please confirm terms of durum contract” and Mr. Achter’s reply text simply said “Ok”. On October 21, 2020, Mr. Mickleborough wrote, “Please confirm terms of Oct durum contract” and Mr. Achter’s reply was “Yup”.

[52] The judge summarized his conclusion regarding the evidence of these prior dealings as follows:

[21] So in short, what we have is an uncontested pattern of entering into what both parties knew and accepted to be valid and binding deferred delivery purchase contracts on a number of occasions. It is important to note that each time [Mr. Mickleborough] added to the offered contract “Please confirm terms of durum contract” and [Mr. Achter] did so by succinctly texting “looks good”, “ok” or “yup”. The parties clearly understood these curt words were meant to be confirmation of the contract and not a mere acknowledgement of the receipt of the contract by [Mr. Achter]. There can be no other logical or creditable explanation because the proof is in the pudding. [Mr. Achter] delivered the grain as contracted and got paid. There was no evidence he was merely confirming the receipt of a contract and was left just wondering about a contract.

…

[61] As I see it, the judge’s reasons appropriately reflect the reality that human communication is often subtle. Words, phrases, gestures and symbols may carry more than one meaning. All of this gives rise to the potential for ambiguity and uncertainty and, indeed, litigation. The law has long accommodated for this, and courts are often called upon to determine the legal import of a multitude of communication types between individuals. The fact that, in this case, one part of the communication comprised an emoji simply provides a modern twist to this otherwise rather unremarkable observation.

[62] This case also illustrates why the factual matrix is important. “Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own, because words alone do not have an immutable or absolute meaning” (Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53 at para 47, [2014] 2 SCR 633, emphasis added). The principles are not different simply because the issue here is one of contract formation or because the mode of communication was electronic, involving a photograph of a document and a symbol delivered digitally with accompanying metadata, and not words uttered or written on paper. Surrounding circumstances are equally relevant in determining the meaning of non-verbal, electronic communication of the kind at issue here.

…

In conclusion the Appeal Court held:

[152] The judge found that a valid and enforceable contract exists between ALC and SWT. He reached this conclusion after examining the history of the parties’ dealings, which included previous instances where contracts were entered into between them via exchanged text messages. The judge determined that a reasonable outside observer, who took account of the relevant circumstances, would conclude that the use by Mr. Achter of the thumbs up emoji was a communication of his agreement to be bound by the terms of the contract proposed by Mr. Mickleborough. The judge’s conclusion on this point must be respected unless it is the product of a palpable and overriding error. As no such error was made by the judge, his finding that a contract for the sale of flax was entered into between ALC and SWT has not been impeached.

(emphasis in bold added)

A link to the full decision may be found here.