A court decision from Canada has received a lot of attention after a thumbs-up emoji in a text message was deemed to show acceptance of a grain contract that required a farmer to deliver $82,000 worth of flax in November 2021.
The grain and crop input company sued the farming operation after it failed to deliver the flax by the “agreed upon” date. The court reviewed past dealings between the parties since 2012: the buyer for the grain and input company would email a photo of the grain contract to the farmer and include the words, “Please confirm flax contract.” Past responses included, “Looks good,” “okay,” and “yup,” and the farming operation would fulfill the contracts.
The farmer’s response to the contract at issue was a thumbs-up emoji. The history of how these two parties conducted business carried the most weight with the court. If this had been a one-time occurrence, the court may have been hard-pressed to establish that the thumbs-up emoji was enough to form an acceptance and signature on a contract. Further, the price of flax had increased by over 140% from the contract price.
The implications of the court decision reach far beyond agriculture. Contract requirements can differ depending on the type of contract, applicable law, the text of the contract, prior course of dealings (a heavy factor in the case at issue), and what constitutes a written contract. For example, the Texas Supreme Court once held that emails with all the necessary and key terms were insufficient to create a contract because the evidence did not establish that the parties intended to be bound by the contract.
Best practice is to always have a contract presented in written form and signed by both parties rather than relying on text messages, emails, or photos and emojis. Although the grain and input company won the case, it likely incurred significant litigation costs and time, which may not have been necessary if the contract had been sent via an electronic signature platform and signed.
If you need help with a contract or a dispute, contact us at email@example.com or 248.477.6300.