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Is an Emoji a Signature? Divided Court of Appeal Makes New Law From Bad Flax

Overview

The “emoji case” made international news when a Court in Saskatchewan found that a flax contract was “signed” by a farmer using a thumbs-up emoji via text message. The farmer appealed to the Saskatchewan Court of Appeal. A divided Court of Appeal in Achter Land & Cattle Ltd. v. South West Terminal Ltd.,[1] has ruled two-to-one that a text message with a thumbs-up emoji was a valid signature on the particular facts of this case, particularly because the parties had a history of informal contracting via text message. This history informed the Court’s decision that a reasonable bystander would interpret the thumbs-up emoji to meet the requirements and serve the purpose of a written signature—i.e., to authenticate the signatory and their intent to be bound. Importantly, the majority was careful to note that this history between the parties was determinative, and it would have been an error if the chambers judge went so far as to suggest that a thumbs-up emoji always signals agreement.

The Decision comes in a post-pandemic world in which contracting parties seek to retain the benefits of remote signing without sacrificing predictability, security, or legal compliance. While this Decision has limited applicability to cases without similar facts, it highlights the risks to parties who adopt a pattern of informal contract negotiation and signing practices.

Background

In 2021, a grain purchaser, South West Terminal Ltd. (“SWT”), sought to enter into a deferred delivery purchase contract for flax with a farming corporation, Achter Land & Cattle Ltd. (“ALC”). After a telephone discussion, SWT’s representative, Kent Mickleborough, prepared and signed a paper copy of a proposed contract for the purchase of eighty-six metric tons of flax at a set price. Mr. Mickleborough took a photo of the front page of the contract and sent it via text message to his counterpart, Chris Achter, asking him to “[p]lease confirm flax contract”. Mr. Achter replied in the text chain with a thumbs-up emoji. When SWT did not receive the flax, it sued ALC for breach of contract.

A central issue was whether the thumbs-up emoji satisfied the requirement in s. 6(1) of The Sale of Goods Act[2] for a written note or memorandum of the contract to be “signed”. SWT argued that the thumbs-up emoji in the text chain was a valid signature in this context. ALC argued that the thumbs-up emoji simply confirmed receipt of the contract and did not satisfy this legislative requirement. The Court of King’s Bench ruled in favour of SWT.[3] It awarded SWT over $82,000 in damages, representing the difference in price between the flax contract price and the market price SWT had to pay to replace the flax ALC did not deliver.

ALC appealed the decision before a three-justice panel of the Court of Appeal. Chief Justice Leurer and Justice Caldwell, in the majority, upheld the lower court decision. Justice Barrington-Foote, in dissent, came to the opposite conclusion.

On appeal, the Court of Appeal granted leave to intervene to Syngrafii Inc. (“Syngrafii”), a Canadian-based global eSignature company. Syngrafii’s distinct perspective is informed by its experience offering electronic signature software called iinked Sign™. Syngrafii’s submissions focused on the need for the law on electronic contracting and electronic signatures to develop cohesively with traditional contracting and ink signatures where the law requires that a document be written and signed. McCarthy Tétrault represented Syngrafii.

Decision at the Court of King’s Bench (Chambers)

ALC argued that the thumbs-up emoji did not constitute a signature or signal consent to contract, but was sent only to confirm receipt of the contract, which Mr. Achter would later review and sign properly. He was responding to Mr. Mickleborough, who had sent only the first page of a two-page contract. The Court of King’s Bench found the first page included all of the essential terms to create a binding agreement and therefore the missing second page did not prevent the parties from contracting in this way.

ALC further argued that allowing a thumbs-up emoji to constitute acceptance of a contract would open the floodgates for interpretation of all types of emojis, with their ever-changing meanings. SWT argued that the thumbs-up emoji sent in this text chain had a clear meaning in the circumstances: Mr. Achter had accepted the contract.

The Court of King’s Bench determined that a thumbs-up emoji was a nontraditional means of signing a document. However, relying on the specific facts of this case—namely, the parties’ history related to four previous contracts—the Court found that an “objective reasonable bystander” would interpret that Mr. Achter applied the thumbs-up emoji to accept the contract. On previous occasions, Mr. Mickleborough had texted photos of contracts to Mr. Achter for his consideration, to which Mr. Achter had replied “ok”, “yup”, or “sounds good” and then delivered on those contracts. Based on this past history, the Court held that an objective reasonable bystander would understand that the emoji fulfilled the signature requirement of s. 6(1) of The Sale of Goods Act: the underlying metadata authenticated the signatory (Mr. Achter) and, given the parties’ history of contracting, the thumbs-up emoji signalled his assent to the contract.

The Key Arguments on Appeal Related to the Signature Issue

The key issues on appeal were:

  1. Did the judge err in finding that the parties had entered into a contract?
  2. Did the judge err in finding that the exchanged text messages met the requirement for there to be “some note or memorandum in writing of the contract” within the meaning of s. 6(1) of The Sale of Goods Act?
  3. Did the judge err in finding that Mr. Achter’s text message with the thumbs-up emoji met the requirement that a contract be “signed by the party to be charged or his agent” within the meaning of s. 6(1) of The Sale of Goods Act?[4]

Our analysis focuses on the last issue: the signature requirement.

On appeal, ALC argued that the thumbs-up emoji cannot be a valid signature under s. 6(1) of The Sale of Goods Act because it does not meet the requirements of a signature under The Electronic Information and Documents Act (the “EIDA”),[5] a statute enacted to ensure equivalencies between electronic contracting and traditional contracting, including between electronic signatures and wet signatures. Similar legislation has been enacted in every jurisdiction in Canada.

In particular, ALC argued that the thumbs-up emoji is not equivalent to marks applied in a wet signature: a thumbs-up emoji can be interpreted in different ways (e.g., an acknowledgement of receipt or acceptance of the contract), whereas a wet signature always has the explicit and clear intent of signaling acceptance of the document. SWT maintained that, given the parties’ previous history of contracting through text exchanges using short, informal terms like “ok” and “yup”, the thumbs-up emoji was similarly used to accept the contract and was therefore a valid signature.

As intervener, Syngrafii contributed a distinct perspective given its expertise in electronic contracting across industries. Concerned with the broader implications of the case, Syngrafii focused on the procedural requirements of electronic signatures as set out in the EIDA. In particular, Syngrafii asked the Court to consider two requirements of electronic signatures, as defined in the EIDA, in circumstances where parties are required to produce a written and signed contract:

  1. If a signature is required either by a party to the contract or by a statute like s. 6(1) of The Sale of Goods Act, it must be directly placed on that contract. Section 3 of the EIDA states that an electronic signature must be “in, attached to or associated with the document.” Syngrafii argued that this requires a signature or mark to be placed directly on or otherwise tied to the document, and not simply contained within the same mode of communication. For example, if the contract is written out in a text message, a signature in reply would suffice. However, if the contract is sent as a standalone attachment within a text message chain, the signature must be applied on that attachment to signal it is responsive to that document. This ensures equivalencies across different modes of electronic contracting, and as between electronic and paper-based contracting. Because communicating by email and text messages is fast, convenient, and an easy way to multitask, parties should not be presumed to provide electronic signatures when the signatures lack the required association with the contract to ascertain the signatory’s intent. In this case, Mr. Mickleborough applied his signature to the signature line on the first page of the paper contract and then sent a photo of that first page to Mr. Achter, which displayed a blank space for Mr. Achter’s signature. Mr. Achter replied by way of a thumbs-up emoji within the text message chain (mode of communication), but not by applying a mark within the photo or contract itself.
  2. If a contract is required to be in writing, the entire written and signed document must be accessible to both parties. Section 8 of the EIDA states that if there is a requirement that information or a document must be in writing, this will be satisfied if the document is in electronic form and is accessible to be usable for subsequent reference. Accordingly, the full contract must be accessible to ensure that the parties to the contract understand and agree to all the terms of the contract.

Decision at the Saskatchewan Court of Appeal

The Majority Decision

The majority upheld the chambers judge’s decision that Mr. Achter’s “thumbs-up” emoji text message (and metadata attached thereto showing the text originated from Mr. Achter’s phone) satisfied the signature requirement in s. 6(1) of The Sale of Goods Act.

The majority laid out the four requirements of an electronic signature under the EIDA:

  1. the presence of some type of “information” on the communication;
  2. that such information may be in electronic form;
  3. the information must have been “created or adopted [by the person] in order to sign a document”; and
  4. the information must be “attached to or associated with the document”.

They held that there was no basis to challenge the chambers judge’s findings on the first, second, and fourth requirements. With respect to the third requirement—concerning whether the party intended to sign—the majority held that, on the facts of this case, the chambers judge rightly found that the text message with the emoji, including the underlying metadata, had identified the signatory (Mr. Achter) and conveyed his acceptance of the contract.[6]

The majority rejected the argument that the signature needed to be on the document itself—i.e., on the screenshot of the contract, rather than in the broader text chain (as it appeared). In particular, the majority pointed to the definition of electronic signature in the EIDA—that an electronic signature is a mark “that is in, attached to or associated with the document.” They reasoned that the plain meaning of the term “associated with” is broad enough to capture the circumstance at issue.[7] Nonetheless, the majority considered that the placement of the mark goes to intent to sign, citing Austie v Aksnowicz, 1991 ABCA 56 at para. 45, which states:

The signature must do two things. It must be so placed as to show that it was intended to relate and refer to, and in fact relate and refer to, every part of the instrument said to be a memorandum […].[8]

The majority also expressly acknowledged that its ruling came down to the history between the parties in this particular case, conceding that:

There may be some validity to the proposition that, taken together, the thumbs-up emoji with the metadata that accompanied Mr. Achter’s text message could not result in a signature if his text message had not been sent in response to one from Mr. Mickleborough or if there had not been a history of authenticated communications between the parties.[9] [Emphasis in original]

The majority expressly cautioned that their recognition of Mr. Achter’s text message as a signature does not mean that every text message constitutes a signature: context matters.[10]

Unfortunately, while such direction helpfully clarifies that an emoji will not automatically bind an unassuming party, the practical effect is that ambiguity remains, and any such ambiguity will need to be resolved on the facts of each particular case with assistance from the Court.

The Dissent

Justice Barrington-Foote, in dissent, disagreed with the majority reasoning and would have allowed ALC’s appeal.

Congruent with Syngrafii’s position, Barrington-Foote JA calls for equivalent formalities between electronic and wet signatures, and views the majority’s position that the emoji and accompanying metadata constitute a signature as tantamount to a repeal of s. 6(1) of The Sale of Goods Act.[11] He also explains that the chambers judge’s emphasis on past conduct is a red herring: whether the parties previously used a “thumbs-up” emoji or a “yes” text message before delivering product is irrelevant to the question of whether either satisfies the signature requirement in s. 6(1) of The Sale of Goods Act.[12]

He reasons that there is no doubt that a text message that constitutes a note or memorandum and contains a mark or symbol signifying consent could meet the signature requirement in s. 6(1). He also agrees that it is necessary that the text message identify the signatory and signify their intention to be bound. However, he explains it is not sufficient to meet these two requirements alone to fulfill the legislative requirement in s. 6(1) that the note or memorandum be “signed”.[13] Instead, he turns to the modern principles of interpretation to explain that the normal definitions of “signed” and “signature” do not suggest that any positive word or symbol is enough to constitute a signature; “rather, it is the writing or placing of words or a mark that represent a signature on the document, with the requisite intention, that means it has been signed.”[14] [Emphasis in original.]

The signature requirement in s. 6(1) was intended to introduce “an element of solemnity or attentiveness to the act of contracting” that can only be achieved where the signature is applied with the expectation that doing so would authenticate the document and bind the signatory.[15] While the lower court found, as a fact, that Mr. Achter intended to agree to the flax contract when he sent the emoji, Barrington-Foote JA found nothing in the evidence to support a conclusion that Mr. Achter’s use of his personal cellphone to send that emoji means he “affixed his signature as the means of authenticating that agreement”—as is the purpose of a signature requirement. Therefore, the dissent would have found the lower court judge erred in law in his interpretation of s. 6(1) of The Sale of Goods Act.

Why This Case Matters

There will be other instances where parties legitimately disagree about whether or not they intended to enter a contract. Contracting parties frequently conduct business through means that would have been seen as informal, unprofessional, or inappropriate when the EIDA was passed in the year 2000, including through text messages and private social messaging apps. The emoji case is one of many in which Canadian courts have found that, from the perspective of an objective reasonable bystander, a party was legally bound even though the party may not have realised they had signed a contract. For example, in Lithium Royalty Corporation v. Orion Resource Partners[16] (“Lithium”), the Ontario Superior Court of Justice determined that an email reply that said “OK, sounds good” was a binding acceptance of a contract (see our earlier blog post). Similar to the emoji case, the defendant argued they did not intend to be bound, but the Court found their conduct said otherwise.

In this Decision, three Justices could not agree on whether or not a party had signed a contract using an emoji in a text message. All believed they were interpreting the law as written. The majority suggested the Legislature should address the issue, if needed: “if commerce or policy considerations dictate some amendment to the law of signatures under EIDA and The Sale of Goods Act, it is for the Legislature to take such steps through statutory amendment.”[17] Yet the dissent stated that the majority opinion “effectively renders the requirement for a signature meaningless in circumstances such as these. A change of that kind is for the Legislature.”[18] Any ambiguity in the statute will remain ambiguous in application.

Without further guidance, there is a risk that short form, casual language will be misconstrued, undermining contracting principles of finality and certainty. Courts cannot pin down a party’s true, subjective intentions. Instead, a party must show how their conduct would be perceived by an “objective reasonable bystander”. If parties have a history of contracting by informal means, a court could find that an “objective reasonable bystander” would conclude that the parties continued to contract informally, even where such intent is contested by a party. Neither casual text message exchanges nor emojis are completely off the table where the parties have introduced and cultivated informal communications as a means of contracting.

Can We Sign Contracts with Emojis Now?

Anything goes, assuming you are willing to litigate. The emoji case received international attention for suggesting a party could sign a contract with an emoji in certain circumstances, but it does not provide broader guidance for electronic contracting. As with Lithium, there is limited comfort to parties who are undisciplined in following statutory requirements and therefore risk costly litigation in the event of misaligned intentions. Parties should think twice before relying on text messages and emojis to execute binding agreements. While the emoji case offers clarity in one specific instance, the Decision is heavily dependent on a decade-long relationship between the two companies and years of informal exchanges between their representatives, Mr. Achter and Mr. Mickleborough. Had the parties more closely adhered to the EIDA from the start of their relationship, there would have been no ambiguity—and no litigation—in the first place.

While electronic signatures can look different from wet signatures, they must still identify the person signing and establish the signatory’s approval of the contract. When engaging in electronic contracting and using electronic signatures, parties should rely on signature methods that align with the relevant electronic document legislation. This legislation exists to provide the parties with confidence that they have made a binding contract and, more importantly, to prove it to a court if things go awry.

Will Using Emojis Prematurely Bind Parties to a Contract?

While electronic contracting may make the signing process more efficient, parties must now introduce new formalities to avoid becoming unintentionally bound. Parties who implement a predictable set of formalities at the point of contract execution will have confidence in when they will be bound but also when they will not be bound. No process will be perfect, and every analysis will be fact-specific. You do not need to go as far as banning emojis, but below are steps you can take to prove (or disprove) your intent to enter into a contract:

  • at the start of a negotiation, communicate to the counterparty how you will execute the contract, including in any term sheet or solicitation of offers (such as a request for proposals);
  • when drafting a clause that states how the parties will amend a contract, word it carefully to align with the preferred level of formality;
  • mark draft agreements as “draft”, in addition to any other appropriate watermarks;
  • when receiving draft agreements for review and further comment, ensure all parties are aware of the draft nature of the agreement and communicate that final approval has not been sought nor provided at this time;
  • identify who within your organization has the power to enter into binding contracts and ensure the counterparty is aware;
  • be particularly careful in non-binding documents, such as a letter of intent, to state when the parties will be bound and that they do not intend to be bound up until that point; and,
  • impose discipline on negotiation teams about who will exchange drafts of a contract and what format those drafts will take.

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[1] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 (the Decision).

[2] The Sale of Goods Act, RSS 1978, c S-1.

[3] South West Terminal Ltd. v. Achter Land, 2023 SKKB 116.

[4] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at para. 38.

[5] The Electronic Information and Documents Act, 2000, SS 2000, c E-7.22.

[6] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at paras. 118-139.

[7] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at para. 122.

[8] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at para. 128.

[9] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at para. 144.

[10] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at para. 147.

[11] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at para. 215.

[12] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at paras. 216-217.

[13] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at para. 191.

[14] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at para. 205.

[15] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at para. 209.

[16] 2023 ONSC 4664.

[17] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at para. 150.

[18] Achter Land & Cattle Ltd. v. South West Terminal Ltd., 2024 SKCA 115 at para. 158.

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