DealMakers - 2023 Annual (released February 2024)
Thumbs up for emojis
by Brian Jennings and Storm Arends
The digital pictogram we know as the “emoji” was invented by Japanese artist, Shigetaka Kurita nearly 25 years ago. Its creation and subsequent acceptance by Unicode caused it to gain popularity and develop into a modern-day form of communication. The “face with tears of joy” emoji even won the Oxford Dictionaries’ 2015Word of the Year Award. Having already crossed the boundary of what we understand language to be, it has now collided with the law of contract.
Canadian case law
In June 2023, the Canadian King’s Bench for Saskatchewan considered whether a valid contract was entered into when the “thumbs up” emoji was used. In other words, was there a meeting of the minds and a certainty of terms. Following various correspondence, in March 2021, a representative of South West Terminal Ltd (the buyer) sent a text message to the owner and operator of Achter Land &Cattle Ltd (the seller) in respect of its purchase of flax. The buyer drafted a contract, applied his ink signature to it, took a photo of the contract with his mobile phone and asked the seller to “please confirm[the] flax contract”, to which the seller replied with a “thumbs up” emoji. A dispute arose when the flax was not delivered in November 2021.
The court, after considering all the facts, took the view that there was a pattern in how the buyer and the seller entered into prior agreements and, therefore, was satisfied on a balance of probabilities that the seller did not just acknowledge receipt of the contract, but approved of it, like he had done on numerous occasions – except that, this time, he used an emoji to do so. The emoji that he used is also known to signify acceptance and approval. Further, the court found that a reasonable bystander, knowing all of the background, would have come to the objective understanding that there was consensus adi dem, a meeting of the minds. In respect of the requirement of there being a certainty of terms, the court found that, given the buyer and seller’s long history of doing business together, there was no uncertainty in respect of the terms of the agreement.
Brian Jennings
Storm Arends
South African law
Considering the Canadian judgment above, one wonders whether this may be applied in South Africa. Section 13of the Electronic Communications and Transactions Act25 of 2002 (ECTA) provides for three scenarios:
1. If a signature is required by law and the law does not specify the type of signature, the requirement is only met if, in relation to a data message, an advanced electronic signature is used.
2. Where an electronic signature is required by the parties to an electronic transaction (which may be a transaction of a commercial or non-commercial nature) and the parties have not agreed on the type of electronic signature to be used, that requirement is met if (i) a method is used to identify the person and to indicate the person’s approval of the information communicated; and (ii) having regard to all the relevant circumstances at the time that the method was used, the method was as reliable as was appropriate for the purposes for which the information was communicated.
3. Where an electronic signature is not required by the parties to an electronic transaction, an expression of intent or other statement is not without legal force and effect merely on the grounds that (i) itis in the form of a data message; or (ii) it is not evidenced by an electronic signature, but is evidenced by other means from which the person’s intent or other statement can be inferred.
Given the definition of “data” in the ECTA as “electronic representation in any form”, and that an “electronic signature” is “data attached to, incorporated in, or logically associated with other data and which is intended by the use to serve as a signature”, an emoji may, in our view, fall within the definition of “data”. If the emoji is attached to, incorporated in, or logically associated with other data, it could constitute an electronic signature if intended to serve as a signature, provided that a signature is not required by law. Therefore, the first hurdle to pass under the ECTA is intent – both as to the use of the emoji as a signature, and, naturally, as a consequence, the intent to be bound by the contract. The ECTA does not prescribe that the intent must be actual intent – it can be evidenced by other means from which the person’s intent or other statement can be inferred.
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Obviously, the use of, say, the “crying face” emoji could not, in any sensible understanding, constitute evidence of intent to serve as a signature. But the “thumbs up” emoji may be. It is clear that in the Canadian case, Justice Keen investigated the background to the parties’ conduct and how they usually conducted business, and concluded in paragraph 18 that:
“The question is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be bound (Aga at para 37). The courts, when considering this question, are not restricted to the four corners of the purported agreement, but can consider the surrounding circumstances (Aga at para 37). The nature and relationship of the parties and the interests at stake help inform the question of an intention to create a legal contractual relationship (Aga at para 38)."
This is similar to our reliance theory, which requires a party to create a belief held by the other contracting party and for the other contracting party’s reliance on such belief to be reasonable in the circumstances. Taking into account all factors, the use of a “thumbsup” emoji (or even the “fist bump” emoji, which is also a sign of agreement) can constitute an intent to serve as a signature, if this can be inferred from such conduct and, therefore, constitute intent to enter into the resulting contract.
Conclusion
Until the South African legal system has to decide on a matter with similar facts, we may not have a clear answer on whether an emoji could replace signatures as we know them. Therefore, be mindful when contracting via messaging platforms like WhatsApp, as an emoji – depending on which one is used – may create a valid and binding contract. Much will depend, we believe, on the facts of the matter and whether reliance on the emoji could be said to be reasonable.
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Jennings is a Director (at the time of writing) and Arends an Associate in Corporate and Commercial | Cliffe Dekker Hofmeyr.
