In our ever-evolving online world, communication has become increasingly reliant on digital communications, including texts with symbols and icons. From the thumbs-up emoji to the smiley faces, these visual elements have transcended language barriers and become a prominent feature of modern communication. But what happens when these seemingly innocuous icons are used in a legal context? Recent news from Canada has sparked a global conversation about the potential legal implications of using emojis in contracts. In this blog post, we delve into Australian contract law to explore whether emojis can influence the answer to the question: “Are digital contracts legal in Australia?”

The current status of digital contracts in Australia 

In Australia, a contract is generally considered legally binding if it fulfils certain requirements, including an offer, acceptance, consideration, and an intention to create legal relations. However, Australian law is not specific to the medium of communication and does not explicitly address the use of emojis in contracts.

A digital contract is an agreement that is formed and executed electronically, without the requisite paper documents. In Australia, under the Electronic Transactions Act 2000 (NSW) ('The Act'), digital contracts are also recognised as legally binding and enforceable, subject to certain additional conditions.

The Canadian Ruling

The case of South West Terminal Ltd v Achter Land & Cattle Ltd, 2023 SKKB 116 (Saskatchewan Court of King's Bench) in Canada specifically brought the question of emojis into the spotlight when it comes to digital contracts. The case involved a contract dispute for 87 metric tonnes of flax deliverable to the Plaintiff. The Defendant’s usual business practice was to send out a mass text message to clients with the details of stock and prices. When the Plaintiff replied to the text, to buy the flax at the advertised price, the Defendant sent back a thumbs up emoji. No further correspondence between the parties were exchanged until after the delivery date when the Plaintiff inquired as to the undelivered flax.

The courts applied the Canadian theory of contract formation, that is the court was to look at "How each party’s conduct would appear to a reasonable person in the position of the other party."

From here, the Court accepted the previous dealings between both Plaintiff and the Defendant, and came to the view that previous contracts were created through informal means. In particular, the parties would correspond with succinct exchanges such as “yup”, “okay”, or “looks good” – and as a result, the Court found that the use of a thumbs up emoji was no different to their previous dealings.

In delivering his ruling on the use of emoji, the judge said courts needed to adapt to the "new reality" of how people communicate. This decision has raised eyebrows and prompted legal experts worldwide to examine the use of emojis in contracts more closely.

Interpreting Intention

One of the key factors in determining whether a contract has been formed in Australia is the intention of the parties involved. In traditional contracts, intention is usually expressed through written or spoken words. However, in the digital realm, where emojis are often used to convey emotions and sentiments, the question arises: Can emojis be seen as an expression of intention in forming a contract, therefore making these digital contracts legally binding.

While Australian law does not specifically mention emojis, it does provide room for interpretation. Courts have historically been flexible in considering various forms of communication as long as the intention to create legal relations is evident. Therefore, it is possible that a court in Australia could interpret the use of emojis in a contract as an expression of intention, depending on the circumstances surrounding the communication.

The influence of Emojis on making digital contracts legally binding

As our means of communication evolve, so too does the potential for their legal implications. The Canadian ruling on the thumbs-up emoji as a legally binding gesture has sparked interest worldwide, including in Australian contract law. While Australian law does not explicitly address emojis in contracts, the flexibility of interpretation and the consideration of intention provide some leeway. However, the lack of legal certainty and the potential for ambiguity suggests that relying solely on emojis in contracts may not be advisable. As we navigate the digital landscape, it is essential to remain mindful of the potential legal consequences of our communication, even in the form of an emoji.

New South Lawyers’ communications are intended to provide commentary and general information. To that end, people should not rely on this communication as legal advice. Accordingly, they should seek formal legal advice for matters of interest arising from this communication.

To find out more, chat with a member of the New South Lawyers Commercial Law Team today.