Meeting of minds of the contracting parties undeniably represents the very foundation of the contract law, hence both theory and practice agree that there is no agreement without it. However, when it comes to the manner of expressing such will, the situation is somewhat different.
The court in Canadian province Saskatchewan has recently ruled that it is possible to conclude a valid contract by using “thumbs-up” emoji (so-called “like”). In the rationale to this ruling, the court stated that the emoji is just as valid as signature and that the courts need to adapt to the “new reality”, i.e., an increasing use of technology in communication and business.
Circumstances of the case
In this particular case, in March 2021, a grain buyer sent a mass text message to farmers, advertising that the company was looking to buy a certain quantity of flax (86 tonnes) at a certain price (17 Canadian dollars per bushel). The buyer then spoke with a farmer on the phone and texted him a picture of the purchase contract referring to purchase and delivery of flax and asked the farmer to confirm the contract by the message. The farmer responded to the text message with a “thumbs-up” emoji.
The meaning of this emoji caused the dispute between the buyer and seller. Namely, the buyer claimed that the emoji meant that the seller was agreeing to the terms of the contract, pointing at previous contracts concluded with the same seller in a similar (informal) way (e.g., by exchanging text messages such as “OK”, “yes” etc.). On the other hand, the seller indicated that the disputed emoji had only been sent to confirm the receipt of the contract photo sent by the buyer, while he had not even looked at the delivered contract (let alone agreed to its conclusion).
Rationale of the ruling
The court took the buyer’s side stating that the disputed emoji, although representing a “non-traditional mean to sign a document”, in this case, i.e., under the specific circumstances, represented a valid way to express consent, i.e., to achieve the purpose of contract signature. The court further underlined that its role was not to attempt to stem the tide of technology in business correspondence, including emojis, but instead to be prepared to meet the challenges that may arise therefrom.
According to the above stated, the court ordered the seller to compensate to the buyer the damage caused for unfulfilled contract (in the amount exceeding EUR 50,000).
Conclusion of contracts in domestic legislation
In relation thereto, the Law on Contracts and Torts of the Republic of Serbia stipulates the following:
- A contract is concluded when the parties have agreed on significant items of the contract.
- The will to conclude a contract can be expressed by words, customary signs, or other acts from which its existence can be established with certainty. The expression of will must be done freely and seriously.
- An offer is accepted when the offeror receives a statement on acceptance from the offered. The offer is also accepted when the offered dispatches an item or pays a price, as well as when it conducts another action which, based on the offer, established practice between the parties or custom, can be deemed as an expression of acceptance.
- Silence of the offered shall not mean acceptance thereof. However, when the offered is in a continuous business relation with the offeror concerning certain goods, it shall be deemed to have accepted the offer pertaining to such goods, unless it had been rejected immediately or in a designated period.
- Conclusion of a contract shall not be subject to any form, unless otherwise prescribed by the law. The parties may agree for a special form to be a condition of validity of their contract.
Therefore, when it comes to informal contracts, domestic legislation allows for the will to conclude contract to be manifested by so-called conclusive actions, i.e., which indicate the existence of intention to conclude contract (animus contrahendi), whereas the degree of certainty with which such conclusion is made shall vary depending on the circumstances of the case and thus it will always be subject to interpretation.
According to the available data, in the previous practice of the competent courts in the Republic of Serbia there was no such extensive interpretation of the stated legal provisions as in the case of the Canadian court, but it remains to be seen how domestic courts will treat the increasing use of electronic means of communication in negotiating and contracting, including digital symbols.
This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.
By Ivana Ruzicic, Partner, and Lara Maksimovic, Senior Associate, PR Legal
