Noteworthy Decision by a Canadian Court: Thumbs Up Sign Established Contractual Relationship

One of the new features that the digital era has brought to our lives is "emoji". The Japanese origin emoji term could be briefly expressed as signs that can be used to enrich messages and/or other messages in the digital platforms. There are many types of emojis, including facial expressions, places, weather types and animals.

The Court of King's Bench in Saskatchewan, Canada, ruled on the legal meaning of emojis, which are freely used in everyday online communications, and whether they can be a declaration of intent that could lead to the formation of a contract.  

In the relevant decision, the court ruled that a “thumbs up” emoji (👍🏽) sent as a text message could be interpreted as consent to the contract. Following this decision, which attracted the attention of the whole world, some legal problems that may be encountered in disputes related to emojis and digital symbols in electronic communication.

Background  

In Saskatchewan, Canada, a grain company (Claimant) has been purchasing grain from the respondent agricultural company (Respondent) since 2012. The way the parties typically do business is as follows: Claimant meets with the Respondent in person or by telephone and agree on a price and volume of grain. Claimant then drafts a contract and sends it to the Respondent. However, as a result of the COVID-19 pandemic, around March 2020, the Claimant's sales team stopped meeting with grain farmers, including the Respondent, in person and began to enter into contracts, usually via email or text message.

In March 2021, Claimant sent a message to the relevant company stating that it intended to purchase flax for delivery in November 2021. Following this message, Claimant prepared a contract for 87 tonnes of flax at USD 669.26 per tonne. Claimant signed the relevant contract and took a photograph of the contract on his mobile phone and sent it to the Respondent with the following message: "Please confirm flax contract". Respondent replied to the message with a thumbs up emoji. However, when the delivery time came, Respondent failed to deliver the flax. The dispute was then brought to court.

Claimant claimed that the thumbs up emoji meant "I accept" or some kind of affirmative acknowledgement. Respondent, on the other hand, argued that the thumbs up emoji meant that he acknowledged receipt of the contract, i.e. the photograph of the text containing the terms of the contract, but did not mean that he approved the contract.  

The court held that there was a valid contract between the parties and that the Respondent breached the contract by not delivering the flax. The court's reasoning is as follows: It stated that the assessment of whether a contract has been entered into is whether their conduct would lead a reasonable person to conclude that they intended to be bound, rather than what the parties subjectively had in mind. The court examined the evidence of the parties' course of dealing and the sequence of events, and, based on the evidence that the Respondent had in the past accepted contracts by texting the Claimant with words such as "okay", "yes" or "looks good", the court found that the Respondent used the thumbs up emoji to indicate that it had accepted the flax contract as proposed; it did not merely indicate that it had received the contract and would consider it, and awarded damages to the Claimant in the amount of $82,200.21 plus interest and costs. The court also rejected the Respondent's argument that allowing the thumbs up emoji to mean acceptance would open the door to all sorts of litigation seeking interpretation of various emojis.

Assessment under Turkish Law  

According to Article 1 of the Turkish Code of Obligations (TBK), a contract is concluded by mutual and appropriate declarations of will of the parties. The declaration is the constitutive element of the contract. An invitation is a legal transaction that gives rise to results by being directed to the other party and enables the establishment of the contract with the acceptance declaration of the other party. The declaration that enables the conclusion of the contract is the declaration of acceptance. In this respect, the question of whether "silence" during the conclusion of the contract constitutes implied acceptance will come to the fore. Pursuant to Article 6 of TBK, "if the proposer is not obliged to wait for an explicit acceptance by law or by the nature of the business or the situation, the contract shall be deemed to be concluded unless the proposal is rejected within an appropriate period of time". According to the majority opinion accepted in the doctrine, as a rule, silence is not a declaration of will and the other party who does not respond to the proposal is not deemed to have accepted the proposal. However, if the addressee remains silent when they are legally obliged to give a refusal, this behavior constitutes acceptance.

In this context, the issue to be analysed in Turkish law in terms of the relevant case is the "trust theory". The trust theory finds its basis in Article 2 of the Turkish Civil Code (TMK). Pursuant to Article 2 of TMK, "everyone is obliged to comply with the rules of honesty when exercising their rights and fulfilling their obligations". According to this theory, while investigating the real will of the parties during the conclusion of the contract, it is examined how the recipient should make sense of all the circumstances and conditions that could be known by them within the framework of the rule of honesty.

Analysing the facts in the relevant case in accordance with the trust theory, it is crucial to evaluate all the phases of the development of the case, the way of doing business of the parties and the expressions used in the messages as a whole. As mentioned in detail above, the commercial relationship between the parties has been ongoing since 2012. Claimant has been conducting contract negotiations electronically with the COVID-19 pandemic. When the evidence submitted within the scope of the case file is examined; there is evidence that the Claimant wrote "Please confirm terms of durum contract" in the past, and the Respondent accepted the contracts by sending messages to the Claimant with words such as "ok", "yup" or "looks good". However, when the content of the subject matter of the dispute is examined, it is seen that the Claimant sent a message as "Please confirm flax contract" as in the previous meetings; and the Respondent sent the thumbs up emoji this time.

In addition, in the assessment to be made in terms of the rule of good faith, it is significant to determine whether there is a common consensus in the society that the thumbs up sign means "I agree or accept". In other words, it is necessary to determine whether the recipient of the relevant sign is justified in accepting it as a statement of acceptance when considered as an objective third party in accordance with the theory of trust. When the relevant message flow and the previous business practices of the parties are examined together, it can be seen that the Claimant requested thee approval of the contract. As a matter of fact, contrary to the Respondent's claims, it is in accordance with the rule of honesty and the ordinary course of life pursuant to Article 2 of the TMK that the Respondent did not consider that he only received the contract and started to examine it. In the evaluation to be made in accordance with the trust theory, it can be concluded that the contract between the parties has been established, taking into account the message flow of the recipient of the relevant sign, the previous business practices of the parties and the fact that the thumbs up sign is generally understood as "okay or I approve" by the society.

Conclusion

Disputes regarding emojis, whose use has increased considerably with digitalization, will not be encountered in the context of every commercial relationship.  However, as in the case in subject, they can be taken into consideration before the courts, particularly at the stage of establishing contracts. It is crucial for the parties to be more careful when messaging or using emoji in their commercial communications, as it may lead to undesirable legal consequences.

You can reach the full text of the Canadian Court’s decision here.

Tagged with: Gökçe, Görkem Gökçe, Elif Aksöz, Technology & Telecoms