South West Terminal Ltd v Achter Land & Cattle (2023) SKKB

The practice was for SWT to draft the contracts and text them to Archter. Archter would then accept the terms by a return text with “looks good”, “ok” or “yup”. The supply would then be made, invoiced and paid. On the occasion of the contract before the court for the supply of 87 tones of flax Archter responded to the texted contract with a thumbs up emoji.

The flax was not delivered and SWT sued for damages for breach of contract. Archter argued that no contract had been entered into and the emoji merely signified receipt of the contract. The court stated that the question was not what Archter “may or may not think a emoji means. It is what the informed objective bystander would understand.”

The court held that a contract had been made and that Archter had breached that contract by failing to deliver. Damages of $82,000 (CAD) were awarded to SWT being the difference in price between the contract in dispute and the cost of the replacement supply.

It should be noted that a thumbs up emoji may not in every circumstances indicate acceptance of contract terms. In the Archter case the court’s determination relied on the prior communications and contractual practices of the parties. Further, as yet there has been no decision in any Australian court relation to the acceptance of contractual terms using a thumbs up emoji.

This case is a valuable reminder that the courts’ approach to contract formation evolves together with technological change.