Defining a contract

The commercial world is largely premised on contractual agreements or arrangements. A universally accepted definition of a contract still does not exist, but the general concession is that a contract connotes an agreement enforceable by law. Succinctly put, a contract implies a promise or set of promises for the breach of which law gives a remedy or the performance of which law in some way recognises as a duty.

Amid the uncertainty around a universal definition of a contract, legal practitioners have formulated elements whose existence connotes a contractual agreement or arrangement. The formation and existence of a contract, from the very onset, requires that parties to the contract must possess the capacity or legal ability to enter into the contract. A valid contract encompasses the elements of an offer, acceptance, consideration, and a mutual intent to be bound.

Technological disruptions in the contracting terrain

The embracing of technology in almost all, if not all, sectors of society has caused paradigmatic shifts in the normalised operations of society. As a result of the disruptions brought about by technology, the terrain of contractual agreements is greatly changing. E-commerce has, as a result, emerged greatly and now thousands of businesses rely on the Internet to buy and sell wares.

Contracts, consequently, are now shifting to the online space as well. The traditional paper method, for contracting, is no longer the norm as commerce is increasingly playing out online. This is due to the ability to send an e-contract worldwide and swiftly, as compared to the hustle of a paper-based contract. Despite the efficiency and convenience that comes with electronic contracting, legal requirements similar to those of traditional contracts must be met. Ideally, the only difference is the medium of the contract, but the form and manner remain the same. Hence, the requirement for execution, which simply connotes the signing or putting of a mark to show acceptance of the terms of the contract, must be embodied, regardless of the form and manner of the contract.

Executing contracts

Ordinarily, contracts are executed by both parties to it by appending their signature or mark,  being confirmation that they approve the terms and conditions of the contract, and further agree to be bound by it. Perhaps one would ask, what is a signature? A signature is best defined to imply any mark made with the intention of authenticating or affirming a document.

For quite some time, before the disruptions brought about by technology, the signing of contracts was predominantly the wet signature from ink. Over time, that changed and electronic signatures are now a worldwide concept. In fact, lately, they are the common embodiment of signatures. Electronic signatures can take varied forms ranging from digitised images of a handwritten signature to a retinal scan of signatures. Security-wise, electronic signatures are solid when handled properly, compared to wet-ink-based signatures. Some electronic signatures are very secure.

Enter the emoji world: Thumbs-up sign to execute contracts

In a recent decision, South West Terminal Ltd. v Achter Land, that is likely to set precedence going forward, the King’s Bench in Saskatchewan, Canada, ruled that the thumbs-up sign emoji (👍) meant the execution or signing of a contract. The brief facts of the case are that a farmer, Chris Acther, and a grain buyer, Kent Mickleborough had agreed on a deal that would see Mickleborough purchase 87 metric tons of flax from Achter. Mickleborough would later take a photo of the contract having signed it and send an image of the same to Achter. As part of the image was a message reading “Please confirm flax contract.” As a response, Achter replied with a thumbs-up emoji.

The failure to deliver the flax precipitated a suit. While Mickleborough argued that the use of the thumbs-up emoji when interpreted alongside the accompanying message, connoted an acceptance and execution of the contract as per the underlying terms. In his defence, Achter argued that in his opinion the emoji did not constitute a signature or agreement.

He further contended that he considered the emoji as an extension of the informal phrases that they had used between each other. He further contended that an affirmation that the emoji signified acceptance and signing of a contract would open a floodgate causing precedence on the interpretation of emojis.  The Court however reached a conclusion that, in consideration of the peculiar nature of the circumstances at hand, the application of the thumbs-up emoji constituted a valid means for Achter to express his acceptance of the flax contract.

The takeaway

This decision by the Canadian courts is a reminder that technology is indeed disruptive. Communication, trade, and commerce are continuously evolving, more so in the digital age. Corporates therefore need to be keen particularly in their contractual arrangements and communications. Some things may look casual, but they could have legal implications when applied in a certain manner. This lays further emphasis on the need to ensure the lines of communication are clear and devoid of ambiguity, more so in contractual agreements, as courts would greatly investigate the intent of parties when interpreting unclear circumstances during contracting.