Does an Emoji Equate to a Grain Contract Signature?
In a case from Saskatchewan, Canada, a farmer must follow through on a $82,000 contract for flax which was confirmed via a text message stream answered by a thumbs-up emoji.
Here’s the series of events, according to court documents and reporting from CNN:
- South West Terminal, Ltd, (SWT) grain purchasers sent a text message to farmers wanting to buy flax for $17 per bushel for delivery in October, November or December of that year.
- After phone calls with farmers Bob and Chris Achter, SWT drafted a contract for Chris Achter to sell SWT 86 metric tons of flax for $17 a bushel and deliver the flax in November. The SWT rep signed the contract in ink and then sent a photo of the contract via cell phone to Chris Achter along with the message “Please confirm flax contract.”
- Chris Achter responded with a “thumbs-up” emoji
- In November, when the price of flax had risen to $41/bu., Achter did not deliver the flax to SWT
The judge ruled based on the dialogue that the deal was “at least verbally struck.” The judge ruled Achter owed SWT $82,000 plus interest and costs for failing to deliver the flax.
“This is a really interesting case,” says Todd Janzen of Janzen Schroeder Ag Law. “I’ve not heard of the exact scenario regarding an emoji, but I think the outcome would be the same in the U.S.”
He offers two reasons for that perspective. "First, we recognize digital signatures in the US as being the equivalent of the old pen and paper signatures. So just because it is a digital “OK” and not his name would likely not matter," Janzen says. "Second, something like this would be settled by the NGFA’s grain trading rules. Going off memory here, but these only require confirmation of a grain trade to be effective.”
In the court proceedings, the SWT employees said this particular farmer had previously completed four other contracts via text responding with “OK,” “yup,” or “looks good.” This particular flax contract was the first time the thumbs-up emoji was used.
Janzen says, “There are cases where a short text OKing a contract have been upheld [in the U.S.]. I think under the NGFA rules this sort of thumb up would be upheld. The context matters a lot, of course. If the prior texts were ‘would you be interested in selling’ which is vague and not clear, it is different than ‘would you sell me 86 tons at $17/bu.’ which is very definite and sounds like a contract to me.”
The farmer disputed the intention of the emoji use saying: “the thumbs-up emoji simply confirmed that I received the flax contract. It was not a confirmation that I agreed with the terms of the Flax contract. The full terms and conditions of the flax contract were not sent to me…”
The judge said: “I am satisfied on the balance of probabilities that Chris OK'd or approved the contract just like he had done before except this time he used a 👍 emoji. In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view, a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions.”
Bushel CEO Jake Joraanstad says, "This is a great example of why agribusinesses should be looking at eSign to minimize the potential for fraud or even misunderstandings. By implementing eSign in existing workflows, like letting your farmer sign electronically in your app, it's even easier than having to go through emails. Through this, agribusinesses can establish a more robust and reliable documentation process, reducing the likelihood of costly mistakes or legal issues, and with the right provider have legal audit trails. It can take the same effort as a thumbs-up emoji, but provide much more accountability and transparency between farmer and agribusiness, for a better experience and relationship in the long-term."
