Emojis – A new era of contracting?

In today’s fast-paced commercial environment, it can be easy to use the colloquial emoji in transactions. The ease and speed with which you can form a response by choosing to use an emoji makes commercial communications a breeze. A heart, smiley face or thumbs up may be an acknowledgement of a message, while a sad face or thumbs down seems to communicate the opposite. As a Canadian Court recently decided, an emoji can also indicate acceptance of a Contract, where severe consequences followed for failure to comply with the terms of that contract.

In the 2023 Canadian case, South West Terminal Limited v Achter Land and Cattle [2023] SKKB 116, the Court ruled that a thumbs up would constitute acceptance. Mr Achter had responded with a thumbs up to a messaged contract, signed by South West Terminal’s representative and accompanied by the words ‘please confirm flax contract.’ The Court found that this was enough to contractually bind the farmer and that he had consequently breached the terms of the contract when he failed to deliver the flax. Sounds a bit harsh, but there were some important factors in this case:

• Mr Achter and South West had a long history (5 years) of communicating via text message; and
• that history of communication had included acceptance of other contracts and questions through the use of short, terse phrases e.g. ‘looks good’, ‘ok’ or ‘yup’.

Common Law Countries 

You may be asking why a Canadian case is important in Australia. The reason is simple - the way we do commerce is changing and although Australian Courts will not be strictly bound to decisions of overseas jurisdiction (like Canada) they will usually use them for guidance in making decisions. Cases in other jurisdictions show that Courts are ready to recognise that emojis can amount to threats and harassment, and locally the District Court of New South Wales determined an emoji could convey a defamatory meaning [Burrows v Houda – When an Emoji Says a Thousand Words!]. Logically, this means there's a good chance that moving forward, contracts in Australia may be recognised as ‘signed, sealed and delivered’ by the humble ‘thumbs up’.

Technology-Neutral Signing

The above is supported by the 2022 amendments to the Corporations Act 2001 (Cth). These amendments made technology-neutral signing (which was introduced in response to the COVID-19 pandemic) a permanent mainstay in contact information. Restrictions on movement during the pandemic required a flexible approach to conducting business across borders. The changes have certainly allowed businesses to contract with ease. The electronic signature is only required to identify the person and indicate their intent towards the document. It is not such a stretch therefore to believe that a heart, smiley face or thumbs up has the potential to bind you and your business. With potential wide-reaching consequences should the other party choose to enforce the contract against you. For Mr Achter the court determined that it ‘cannot …attempt to stem the tide of technology and common usage’ and those consequences amounted to approximately AUD 90,000 worth of damages for breach of contract.

Enterprise Legal’s Top Tips

1. Don’t fall into the trap of informality – building relationships with your stakeholders is important but when it comes to contracts or documents of a serious nature, maintain formality in communications;
2. Be clear – ensure that your words accurately reflect your intention;
3. ‘Better Late Than Never’ – if you have accidentally sent an emoji (or you did it on purpose but are a bit worried about the consequences) follow it up with another message to confirm your intention;
4. Seek specialist advice – regardless of your communications, get in contact with Enterprise Legal to review your business contracts, service agreements and entity structure to ensure your assets are safeguarded.

How Enterprise Legal Can Assist
Enterprise Legal’s Business Team are experts in the field and can provide you with the advice required to give you confidence in your commercial transactions.

Please don’t hesitate to contact our Business Team if you have any questions about this article or to discuss your commercial and business needs.