Emoji Contracts: Seal it with a Click!

[Ria and Ananya are students at West Bengal National University of Juridical Sciences.]

In an era where digital communication often blurs traditional legal boundaries, the Canadian case South West Terminal Limited v. Achter Land, is a landmark development in contract law that questions the very nature of contract formation. It addresses the issues of common law contracting and digital age communication to determine if a ‘thumbs up’ emoji is valid acceptance of an offer. A conflict emerged when a buyer, after a telephonic conversation, sent a ‘thumbs up’ emoji in response to a texted photo of the contract. The buyer argued it to only signified receipt and not acceptance of the alleged offer. However, the court held that a reasonable person would consider the emoji as constituting contractual acceptance. This article examines the evolution of emojis from frivolous figures to signifying legal intention by probing into legal argumentation and judicial rationale. It delves into the obstacles limiting contemporary communication channels and potential resolutions to mitigate such risks, ultimately underscoring the technological influence on legal practices.

Contractual Provisions in Action: A Case Analysis

The ever-evolving field of contract law has witnessed the zenith of emojis, ranging from mere digitally emotional tools to major signs exhibiting legal intention. While we continue to endure the labyrinth of modern communication, these pervasive icons provoke interesting questions regarding clarity, consent, and constantly developing contractual agreements. Traditionally, at the core of a legally binding contract lies 4 elements, namely, offer, acceptance, consideration, and legal intention to enter into it.

Legal intent

A prerequisite to forming contractual relations is the element of legal intention as enshrined under Section 2 of the Indian Contract Act 1872. Following the refutability of the presumption of lack of legal intention, due to the presence of an outsider, the same is deciphered from the circumstances prevailing around the formation of the contract. Referring to the case in point, the intention attached to the trader while sending proposals was to forge business relationships with the concerned party in an unambiguous, legally binding manner. 

Meeting of the minds

Enshrined under Section 13, consensus ad idem, i.e. meeting of the minds, is the backbone of forming any legally binding contract. The parties to the contract should agree on the same thing in the same sense. If there is a misunderstanding or one party does not comprehend the terms as the other intended, there is no contract. The setting surrounding the formation of the agreement is one of the determining factors of commonality of interest of the parties to enter into a contract. WhatsApp as a means of communication is considered to be informal and vague, making no commercial sense to a reasonable bystander. 

Comprehension discrepancies

Furthermore, cultural differences may make it impossible for one side to comprehend the other when it comes to thumbs-up emojis, making it a major barrier to mutual assent. The thumbs up emoji is not universally accepted as an expression of unqualified approval in many cultures; in fact, some consider it revolting or interpret it as denoting the number one or five rather than assent. It is even regarded as disrespectful in nations including Afghanistan, Greece, Italy, and Iran.

Business relations

Despite this, the past communications and transactional style of the parties can pave the way for ascertaining the presence of mutual assent. It was clear from examining the nature of the parties' long-standing connection that the defendant had used phrases like "yep," "k," or "looks good" to indicate that previous contracts were accepted. The court reached the conclusion that, given this context, a fair-minded observer would assume that the emoji response constituted a legally enforceable contract.  

Invitation to offer v/s offer

The communications at hand can be reasonably interpreted as either an "invitation to offer" or an "offer". Signifying a general intention, an invitation to offer is addressed to the public at large, whereas an offer is directed towards a specific person with a clear and definite intention, leaving nothing open for further negotiation.

Promotional tactics

The communications of the trader, if used as a marketing strategy to filter out prospective buyers to gauge interest, will be considered an “invitation to offer”. On receipt of the proposal, the buyer’s choice to willfully respond to the message will be construed as an offer, awaiting the trader’s acceptance, when he had the option of leaving the message unresponsive, leading to no legal consequences. In furtherance of the same, the supplier accordingly delivers the consignment, which will be termed an unconditional acceptance of the above-mentioned offer, barring the buyer from going back on his offer. 

Specific interactions

On the other hand, if the communication is directed towards a specific buyer with an unwavering intention to form a legally protected relationship, it would be termed an “offer”.  Subsequently, there can be 2 outcomes. The thumbs-up emoji, when used as a mere reaction to the text itself, will be construed as an acknowledgement from the lens of a reasonable third party. At the same time, if the buyer chooses to exercise his own volition to actively respond by sending a thumbs up emoji, it would be interpreted as an acceptance of the corresponding offer.

Acceptance

Under Section 9, such an acceptance by conduct will be inferred as an implied acceptance. This act would be treated in the same light as an acceptance via a handshake or nod. In consideration of the fact that the buyer was already presented with a full proof written agreement via text communication, all the necessary terms were conclusive with others capable of being made certain by an objective criteria. As acceptance is given, the same will not be affected by the absence of a formal written contract. A contract comes into existence at the time of acceptance of the ‘essential terms’ of the contract; minor details can be agreed upon later.

Given that a statute’s primary purpose is to provide the court with evidence of the agreement between the parties, ideally it should allow to do so with a contract written using emojis just as with alphabetic letters. Considering, the custom of typing up a contract is mainly for the parties to feel obligated to the agreement, it should be undertaken independently of the representation used for the same. This would lead to the court viewing acceptance by emojis as valid. At the same time the court may hold usage of emojis as signs of “great optimism”, just short of an unconditional acceptance. Nevertheless, liability can still be imposed on grounds of loss occurred due to bad-faith negotiations. Such varied interpretations to serve as logical outcomes, should be scrutinized by the court in light of the distinct fact scenarios it faces.

Addressing Contractual Issues: Challenges and Potential Solutions

Recognizing emojis as a valid form of acceptance comes with its own set of perils. A mistake as to a false fundamental assumption going to the root of the contract as the basis for this agreement, which both parties had in mind at the time they entered into it, would make the same void.

Mistake of identity

One such shortcoming is the mistake of identity of the parties. In the case of face-to-face communications, there is a strong presumption that each intended to deal with the person present in front of them. If the parties are communicating through correspondence, as is the case here, one party is not sure about the identity of the other party.

Unintended contracting

Emoji usage in contractual circumstances should be discouraged due to the potential for unintentional contracting. Even if the offeree uses an emoji to reply to an offer and subjectively intends to express a kind gesture rather than an acceptance, the offeree still runs the danger of unintentionally entering into a contract if the offeror views the emoji response as an acceptance. Emoji users accept responsibility by default for any unintentional impression of assent. In other words, the offeree has carelessly generated “an appearance of assent” if they “have reason to know that the offeree’s conduct may cause the other party to understand that the offeree assents.” Whether the offeree approves of it or not, a contract will be made in this situation.

Hasty approval

Although many contracts are still signed today using traditional paper and ink, most contracts don't require the same. There is no ceremonial handshake, no signing ceremony, and definitely no hot wax or seal. The idea that multi-million dollar contracts may abruptly be established and modified with the simple pull of a telephone or a thumbs up emoji is unsettling; taking only a few seconds at most and involving no thought, much less the chance for legal counsel to analyze the new arrangement. Despite all the benefits of texting, speed, and convenience in the modern era, this one is dangerous and can result in hurried contracting.

Prospective resolutions

Education is essential; the parties must realize that tweets, emails, and messages have legal implications. Considering the informality of these types of communications, it shall not be presumed that the parties would be immune from contracting something. Communications via messages should be expressly labelled as subject to contract if the same is intended. Any agreement struck should specify whether it is meant to be legally binding or if the parties agree that any agreement must be formally documented and signed by both parties in order to be enforceable. It should also be made clear that counterparties have agreed to uphold their end of the agreement and that all essential provisions have been consistently understood by all parties.

Conclusion and the Way Forward

The case of South West Terminal Limited v. Achter Land demonstrates the increasing impact of digital communication on contract law, necessitating a re-evaluation of how contracts are construed and enforced by courts. In holding that a ‘thumbs up’ emoji operated to signify acceptance, the court recognized the evolutionary trajectory of contractual communications in the digital era. The decision exposes the dangers and difficulties associated with casual communication, which serve as a warning of the risks and imprudence surrounding such exchanges in an era where technology affords easy-read contracting. In a nut shell, the decision highlights that while modernization may offer advancements for contracting in terms of ease and efficiency, it also carries perils that ought to exclude these formats from reaching captured legal relations.