We are all aware that we are living in an increasingly digital age. From social media to digital streaming, it is clear that digital technology plays an ever important role in our lives. In fact, a 2022 screen time report found that the average non-work related screen time among UK adults is 5 hours per day. It is therefore unsurprising that this has had an impact on the ways in which we communicate, with perhaps the most obvious example of this being the regular use of emojis.
With over 3,500 emojis in existence, it is difficult to find any situation to which one cannot be applied. A recent case in Canada, however, has demonstrated that while we often think of emojis as confined to informal social interactions, they can actually have much more significance than we may realise.
The Electronic Communications Act (2000) defines an electronic signature as, ‘something associated with an electronic document that performs similar functions to a manual signature’.
It is now common practice for businesses to enter into contracts using electronic signatures, with the speed and convenience this offers appealing to the increasingly efficiency-focused commercial culture. The use of electronic signatures also allows cross-border contracts to be executed at the simple click of a button, demonstrating the positive impact that technology can have on business relations. This has led to the rise in popularity of e-signature platforms, such as DocuSign, which allow the creation of digital signatures, as well as allowing users to get their documents witnessed electronically, before delivering fully executed documents into the signatory’s email inbox.
Whilst it may be obvious that a digital signature creates a legally binding contract, other forms of electronic signature may be less clear. In fact, it is possible to create a legally binding contract with an automatically generated email signature, or by typing your name electronically onto a document. This is demonstrated by the case of Neocleous v Rees (2019) in which the court held that an email footer containing the name and details of the sender amounted to a legally binding electronic signature. If the deal in question meets the required elements for a contract – being offer and acceptance, exchange of consideration, intention to be bound and certainty as to what is agreed – then there is a high chance that simple electronic signatures will be considered legally binding.
South West Terminal Ltd. v Achter Land, 2023
A recent court decision made in the Canadian province of Saskatchewan made international news when a judge ruled that a thumbs up emoji should be considered a form of legally binding electronic signature.
The case involved a contract for South West Terminal (SWT) to purchase a flax order from Achter Land, in which the buyer spoke with Chris Achter on the phone, before texting across a photograph of the contract and asking Achter to confirm the contract. Achter replied with a thumbs up emoji but later failed to meet his contractual obligations.
The court made its decision based on a number of factors, including the parties’ prior business relationship and the generally accepted interpretation of a thumbs up emoji, but ultimately ruled in favour of SWT that Achter was in breach of a valid contract.
Berry Smith Comment
While this ruling occurred in Canada, it has caught the attention of law firms internationally as it solidifies the possibility that the use of emojis could potentially satisfy the definition of an electronic signature. After all, if an automatically-generated email signature can create a legally binding contract, why should an emoji be any less valid?
There has yet to be court recognition of the use of emojis as electronic signatures in the UK, however this case highlights the importance of understanding contract acceptance in the digital age. It is important that businesses recognise that things that seem casual or informal, such as email signatures and emojis, can actually constitute valid acceptance of a contract under certain circumstances, particularly if then reinforced through conduct. Therefore, clear communication between parties is key in order to avoid forming accidental contracts, or misunderstanding contractual obligations, leading to potential disputes down the road.
With more and more UK businesses showing a preference for quick and convenient electronic signatures, alongside our ever-increasing reliance on technology, it is likely only a matter of time before a similar case crops up in a UK court. Whether a British judge will give emoji signatures the ‘thumbs up’ remains to be seen, but, in any case, understanding electronic signatures is key in an increasingly digital commercial landscape.
The Commercial & IP Team at Berry Smith can provide specialist advice on commercial contracts, as well as general commercial and business advice.
Please contact us if you would like more information about the issue raised in this article or any other aspect of Commercial law at 029 2034 5511 or firstname.lastname@example.org