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The digital age has significantly transformed communication, making it faster than ever before. However, the widespread use of instant and disappearing messages, social media comments or direct messaging, and even emojis has blurred the lines of what constitutes a legally binding agreement. While many still believe a contract is only enforceable when formally signed—either physically or electronically— that is not the case.
Key elements required to form a legally binding contract include: offer, acceptance, consideration, intention to create legal relations and certainty of terms. Contractual acceptance can take various forms, including digital acknowledgements. Acceptance must be clear and unequivocal. If a message agreeing to a contract disappears after being sent, it does not mean that a contract has not been formed, only that there may be difficulty in proving this for the party seeking to rely on it, in the same way as an oral agreement. Courts will consider the conduct and communication between the parties when determining whether a contract has been formed.
The thumbs-up case: South West Terminal v Achter Land & Cattle
In the Canadian case of South West Terminal (“SWT”) v Achter Land & Cattle, South West Terminal from 2023, SWT sought to enforce a contract for the delivery of 87 metric tonnes of flax at a predetermined price. The key issue in the case was whether the informal nature of the communications (texts and calls) could constitute a legally binding agreement, even though a formal written contract had not been signed.
SWT sent a signed contract via text message to Achter Land (“AL”), requesting confirmation with the message: "please confirm flax contract." AL responded with a thumbs-up emoji. The contract was never physically or electronically signed by AL.
SWT argued that the thumbs-up emoji constituted acceptance, while AL contended that it was merely an acknowledgement of receipt. The court ruled in favour of SWT, concluding that the thumbs-up emoji signified acceptance, given the established history of contractual dealings between the parties. Previous interactions demonstrated that AL had accepted contracts with simple affirmative responses, such as "yup," "OK," or "Looks good."
The court applied an objective test, assessing what a reasonable person, knowing the full context, would conclude from the exchange. This raises the question: could a similar outcome occur under English law? English courts have previously found that other digital actions can constitute acceptance, so in right circumstances emojis may too.
Issues of interpretation
Lord Clarke’s comments in RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH & Co KG underscore that whether a binding contract exists depends on what the parties have agreed upon, based on the words exchanged or conduct, not their subjective state of mind. The court’s focus is on determining whether the parties intended to create legal relations and agreed on all essential terms, regardless of what form such communication takes.
An added layer of complexity may arise when the meaning of an emoji is open to interpretation. While older generations may stick with the tried and tested laughing face or thumbs up, younger generations regularly use emojis to create sentences or express ideas beyond their literal meaning, and the meaning attributed to emojis may vary across jurisdictions.
It was reported that in 2017 a landlord was awarded damages in the Israeli case of Dahan v Sharcharoff based on positive emojis included with a message sent by prospective tenants in response to an advertisement about an apartment to rent. While a contract was not found to have been formed, the message which included a bottle of champagne, smiley face, squirrel and comet were considered to be misleading, constituting a bad faith negotiation, and that the owner was justified in thinking that they wanted to rent the property.
The future of contract law in the digital age
As technology and methods of communication continue to evolve, so too does the landscape of contract law. The increasing reliance on digital communication—whether through emails, text messages, social media, or emojis—has transformed how agreements are formed, accepted, and enforced. In this new era, traditional concepts of contract law are being applied to modern issues, requiring courts and legal professionals to adapt.
Further information
If you have any questions regarding this blog, please contact Leyla Maestri or Úna Campbell in our Dispute Resolution team.
About the authors
Leyla is an Associate in the Dispute Resolution team at Kingsley Napley. Leyla has experience acting on a broad range of disputes, including complex cross-border litigation, civil fraud matters, contract disputes, contentious trust and probate claims and arbitration proceedings.
Úna is a trainee, currently sitting in the Dispute Resolution team. She works on a broad range of matters, including contractual disputes.
We welcome views and opinions about the issues raised in this blog. Should you require specific advice in relation to personal circumstances, please use the form on the contact page.
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