Using emojis in business communications can have serious legal consequences, as confirmed by a recent Canadian court. In the S. W. Terminal v. Achter Land Cattle Ltd. case, a Canadian court ruled that a farmer’s thumbs-up emoji response to a text message created an enforceable contract.
In that case, the dispute centered around a farmer’s business dealings with a grain processing co-op. An employee of the co-op prepared a contract for a grain shipment, and the employee signed the contract and took a photo of it on his cellphone. The employee then texted the photo to the farmer, saying “Please confirm flax contract.” The farmer responded with a thumbs-up emoji.
When the shipment failed to arrive, the co-op sued for breach of contract. The co-op claimed the emoji functioned as the farmer’s signature and was sufficient confirmation of agreement to the terms of the photographed contract. The farmer denied that the thumbs-up emoji was intended to convey agreement to the contract, claiming that the emoji was only intended to show he received the proposal. He testified that he was expecting the full terms of the agreement to be later faxed or emailed to him for review and signature.
In granting summary judgment to the co-op, the Canadian court opined that the emoji response acted as both a digital signature and evidence of consent to the terms of the contract. The court assessed the basic elements of contract formation (agreement, offer, acceptance) and confirmed that all were met by the text-emoji exchange.
Emojis have become part of the new reality in society, gradually becoming an accepted and generally understood means of communication. But an emoji is inherently ambiguous, creating a fundamental problem with recognizing emojis as legally enforceable representations in the business world.
In contracts, word choice matters a great deal. Lawyers spend considerable time selecting the right language to precisely convey the parties’ intentions. Still, there is no shortage of contract disputes. The challenge of preventing future contract disputes becomes significantly more difficult if U.S. and Texas courts begin to adopt the Canadian approach — recognizing emojis as contractually binding communications.
Does a thumbs up simply convey “got it” versus “agreed”? Does a hug emoji mean you are sending your sympathy, or you have romantic feelings for the recipient (and could that be the basis of a harassment suit)? Is a smiley emoji intended to convey sarcasm or genuine happiness? The implications of misunderstood emojis are significant for personal relationships, but now we must also worry about the potential legal ramifications of a misunderstood emoji.
Research suggests no U.S. or Texas courts have yet to adopt the Canadian approach in the context of contract law. But at least several hundred opinions issued by U.S. and Texas courts confirm emoji evidence has played a material role in nearly every type of case — and at least some courts have relied on emoji evidence to convict criminal defendants. A survey of those cases suggests the U.S. courts generally agree with the reasoning behind the Canadian court’s opinion: That emojis, with context, can be legally actionable.
For example, in the recent case of In re Bed Bath & Beyond Corp. Sec. Lit. in the District of Columbia, U.S. District Judge Trevor McFadden issued an opinion evaluating an alleged stock manipulator’s tweeted emojis that purportedly excited investors and manipulated the retailer’s stock price. The defendant claimed that emojis can never be actionable because they have no defined meaning. The court rejected that argument, explaining that emojis are “symbols” that can be ambiguous but context and tone help elucidate meaning. The court concluded that “Emojis may be actionable if they communicate an idea that would otherwise be actionable. … Just like with words, liability will turn on the emoji’s particular meaning in context.”
The D.C. court’s approach was consistent with what appears to be the majority view taken by courts throughout the U.S. Emojis have been increasingly relied on as evidence in employment, trademark, business, tort and criminal cases, and courts have generally been willing to consider the intended meaning of emojis in such cases. It seems likely that U.S. courts will eventually confirm that a texted emoji response may create a contract — if the context suggests the emoji was used to “symbolize” agreement.
Meanwhile, businesses and their counsel would be wise to expect that emojis have legal consequences, just like words and symbols. Precautions should be taken to ensure that businesses avoid or limit their use of emojis in business communications given the inherent risk of ambiguity and miscommunication. Where emojis are used, care should be made to avoid any misunderstanding of the intended message.
Aimee Fagan is a partner in the Dallas office of Sidley Austin and serves as a co-leader of the firm’s IP Litigation practice.
