As a matter of common sense, as well as in law, parties to an agreement need to know when that agreement has been reached. In legal terms, an agreement comprises offer and acceptance. One party makes the offer, and the other party accepts the terms of that offer. If the offeree amends the terms, then there is no agreement.
We all understand those simple principles of contract law, and we use them when we make agreements every day; from arranging a time to meet a friend, to formal contractual negotiations in the course of business.
But the way we communicate has changed over time and now most of us are used to conveying meaning through emojis. This raises interesting and important questions in contractual negotiations.
Can you accept a contract with a thumbs up emoji? Or a handshake? Or a fist bump?
The ambiguity of an emoji
The problem with replacing words with emojis, is that these pictures can be unexpectedly ambiguous in their meaning. For example, to one person it may seem obvious that their ‘thumbs up’ meant ‘I accept’. But to another person, their ‘thumbs up’ only meant ‘I acknowledge receipt of your message’ or ‘I understand what you’re saying’. It is not unequivocal acceptance.
This ambiguity was tested in the US courts recently. In Lightstone Re LLC v Zinntex LLC 2022 [1] Lightstone agreed to purchase personal protective equipment from Zinntex. After Zinntex failed to deliver the masks, Lightstone sought to cancel the contract and get a refund.
In a series of text messages, the parties discussed repayment terms. Lightstone asked that Zinntex enter a formal agreement and requested a personal guarantee from its principal. But Zinntex refused and instead sent a text to Lightstone confirming “I will have you paid out within 3 months.” Lightstone replied with a summary of the four payments they expected on which dates. Zinntex responded with a thumbs up emoji.
Did a ‘thumbs up’ bind the parties?
Zinntex failed to keep up with the repayments and Lightstone sued for breach of the settlement agreement, which comprised the series of text messages. While the court found that Zinntex was liable to pay the money to Lightstone, it came to that finding on the basis of the statute of frauds.
On the discussion about the thumbs up emoji, the court found that it was not sufficient to conclude the agreement. The reason was the ambiguous meaning of the emoji, and the context of the text exchange: “there are surely questions of fact whether the defendant [Zinntex] intended to be bound by that emoji where only nine minutes beforehand the defendant categorically asserted he would not sign any document”.
The ’thumbs up’ was not sufficient to bind the parties on this occasion.
A breach of good faith?
In another example, emojis were sufficient to convey a positive intention. In Israel, a judge awarded a landlord $2,200 in damages for breach of the duty of good faith. The landlord received a series of positive-looking emojis (such as a corked champaign bottle, and smiley faces) from the potential tenant, which he relied on to take the property off the market. The potential tenants eventually ghosted the landlord and didn’t end up taking the property.
The judge awarded damages to the landlord for the other side’s breach of statutory duty to negotiate in good faith.
However, there is no such statutory duty to negotiate in good faith in the UK. The parties may agree to negotiate in good faith, but these agreements are often deemed to be unenforceable by the courts.
In the UK then, it’s unlikely that there would have been any recourse for the landlord in these circumstances.
Practical takeaways
Clarity is still king in contract negotiations. Emojis have their place in conversational to-ing and fro-ing, if you have that sort of relationship with the other party. But for any agreement, variation or settlement agreement to be binding, the most robust sign of acceptance is a signature on a formal agreement.
If you have any questions about the validity of your agreements, or you’d like advice to firm up your contractual relationships, please get in contact with us at SME Comply.
[1] WL 3757585 (Kings Cnty. Sup. Ct. Aug. 25, 2022)
