If you want to know the honest answer, talk to a farmer in Canada. He was held by a court to pay $50,000. This landmark court case decided a few weeks ago, found that a farmer entered into a legally binding contract with a thumbs-up emoji.
So the question is whether the farmer was obligated to pay, and the answer is yes. But how do you enter into a contract when you end a text message with a thumbs up? It's not only a question of digital communication and contracts, but also, what does it mean when just a symbol is there to show intent?
The court held that the farmer was obligated to keep his contract up because the thumbs-up is considered precisely what it is today: an agreement. This sheds light on the significance of standardized texts. How do you identify what does this mean? And also the impact on SMS messages, I-messages, WhatsApp messages, and other messaging services. The court case isn't the question of what is a valid contract in the digital age. Traditionally we know it all contracts were formed by signing papers. However, as the communication methods evolved, the courts had to accept and adapt to consider what is a valid electronic contract.
Talk about DocuSign. Talk about all those great tools for electronic signatures that are verified, validated, and put into a legally binding scenario. But here it's about a thumbs-up emoji. Is this enough to share an intent, clarify an intent, and classify a transaction as legally binding? This ruling is a precedent in Canada and how digital actionscreate legal consequences as part of our regular communication.
"I got your message. I will get back to you later." What was "later" never happened. And at the end, the prices of bushels of corn and whatever it was, changed and therefore, the other party felt the thumbs up meant, "yes, I will do it at that price." Courts often apply a so-called reasonable person test to determine whether the thumbs-up is a valid contract. In the context of text messages, this means examining whether or not a reasonable person could assume that a thumbs up means something more than to make the other party smile. Did the parties intend to be bound by the thumbs-up emoji? This test also safeguards against misinterpretation and ensures the law is applied consistently.
This case is not an isolated incident. Similar cases have been adjudicated in other jurisdictions in the United States and Australia. In all those cases, the courts have determined emojis can create binding contracts. The ruling underscores that businesses must be careful and, even more importantly, tell their salespeople that a thumbs up could bind the company.
So how can businesses avoid entering into an unintended contract? The answer is clarity. Be explicit about what you want to do. Be explicit about when to create a legal contract. And even more important, what are the terms? Use clear language and avoid using emojis. If the farmer would have said, "I will get back to you, thumbs up." this would not have been a contract. If the farmer had said "deal". Let's do it. Thumbs up." It would have been clear, but just two thumbs up. Well, let's wait. How will the courts decide? This case matters, however, to global businesses. As we can see, the different communications worldwide and customs in one country may differ in other parts.
This case also highlights that clarity is the key to good communication. If you want to avoid creating a contract, be clear about what it is. The digital age has changed how we communicate. As a global business leader, it's essential to not to enter into unwanted contracts. So how can we ensure that our digital communications are clear and legally sound? As a business, how can you strike the proper balance between modern communication and leveraging safeguards that prevent you from being unintentionally stuck into a contract in an interconnected world?
As always, a huge "Thank You" to Judgement War Productions and Colin Verba for the excellent work in producing the Morning Musing
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