Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Be Careful With Your Emojis When Conducting Business Dealings

Author: Dan Brecher

Date: July 18, 2023

Key Contacts

Back
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.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know post image

Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know

When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]

Author: John D. Giampolo

Link to post with title - "Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know"
Zoning Laws Explained: What You Need to Know Before Buying Property post image

Zoning Laws Explained: What You Need to Know Before Buying Property

Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]

Author: Wendy Rubinstein Quiroga

Link to post with title - "Zoning Laws Explained: What You Need to Know Before Buying Property"
Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future post image

Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future

For parents of a child with a disability, estate planning raises concerns that go well beyond deciding who will inherit their assets. Parents may spend years making sure their child has the right care, services, and support. Eventually, they must also confront a difficult question: Who will take over when they can no longer do […]

Author: George McGowan

Link to post with title - "Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future"
What Every Real Estate Investor Should Know Before Buying a Rental Property post image

What Every Real Estate Investor Should Know Before Buying a Rental Property

Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]

Author: Donald M. Pepe

Link to post with title - "What Every Real Estate Investor Should Know Before Buying a Rental Property"
Can You Change an Irrevocable Trust in New Jersey? post image

Can You Change an Irrevocable Trust in New Jersey?

In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]

Author: Marc J. Comer

Link to post with title - "Can You Change an Irrevocable Trust in New Jersey?"
How Intellectual Property Valuation Will Impact Business Transactions post image

How Intellectual Property Valuation Will Impact Business Transactions

Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]

Author: Jay McDaniel

Link to post with title - "How Intellectual Property Valuation Will Impact Business Transactions"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.
“If you would like to submit a file, please email it directly to info@sh-law.com.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!