😊 👍 💰, We Have a Contract!

Jul 25, 2023
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By: Daniel J. Gershman, Esq.

The use of Emojis has revolutionized the way we communicate, enabling us to express a vast range of emotions, and add visual depth to our digital conversations. However, the significance of emojis, specifically the interpretation of their usage, is under legal scrutiny by U.S. and international courts. Legal proceedings seeking to interpret the meaning or intention of an emoji are becoming increasingly prevalent.

Emojis in the Courtroom

On February 22, 2023, in Friel v. Dapper Labs, Inc. et al,[1]  United States District Judge Victor Marrero found, in part, that Dapper Labs, Inc.’s non-fungible token constituted an investment vehicle, relying on the Company’s use of the rocket ship, stock chart depicting upward trends, and moneybag emojis—🚀, 📈, and 💰, respectively—in public statements and marketing materials.[2]  Significantly, Judge Marrero found that the use of the emojis objectively led purchasers to anticipate a financial return on their investment, which sufficiently met the expectation-of-profit prong of the test to determine whether a transaction qualifies as an investment contract (i.e., a security) under federal securities law.[3]

The U.S. courts are not alone in seeking to determine the legal implications of using emojis in business dealings.  On July 31, 2017, in Tahan v. Haim Shakharoff et al,[4] Judge Amir Weitzenblit found, in part, that Haim’s use of the smiley face, dancer, champagne bottle emojis—😊, 💃, 🍾, respectively—while not establishing a legally binding contract per se, nevertheless conveyed an optimistic outlook which led Tahan to reasonably believe that Haim was genuinely interested in pursuing an agreement.[5]

More recently, on June 8, 2023, in South West Terminal Ltd. v. Achter Land & Cattle Ltd,[6] Justice Timothy Keene of the Court of King's Bench in the province of Saskatchewan, Canada granted plaintiff’s summary judgment motion, holding that the thumbs up emoji—👍—sent in response to a text containing a picture of a partially signed contract constituted a valid form of signature, creating a legally binding agreement.

The starting point for Justice Keene’s decision was the everyday use of the emoji as well as its current definition: “to express assent, approval or encouragement in digital communications.”[7]  In doing so, Justice Keene found that under the circumstances the 👍 emoji is akin to “an action in electronic form” that can be used to express acceptance as contemplated under Section 18 of The Electronic Information and Documents Act of 2000.[8]

The Future of Emojis in Legal Communications

While we have not surveyed the landscape regarding the effect of emojis in potential legal communications, these rulings suggest the possibility of the legal recognition of emojis as a binding expression of intent in legal communications or with respect to contractual agreements. With emojis continuing to dominate digital interactions, and as the courts are presented with more of these cases, it will be imperative to establish guidelines to ensure consistent interpretation of such communication to maintain the integrity and effectiveness of contractual agreements in the digital age. Otherwise, the seemingly innocuous use of 😊 💰 👍 may hold the same legal weight as the words “I accept”.

Until such time, it's crucial for businesses and individuals alike to understand the potential legal implications of their emoji use, particularly in contexts that may be construed as contractual or legally binding. If you have any questions about how this could affect your business, please reach out to Falcon Rappaport & Berkman at (212) 203-3255 or submit the contact form below today. We are here to help you understand and navigate these new challenges in the digital age.

[1] No. 1:2021cv05837 - Document 43 (S.D.N.Y. 2023).

[2] Id.

[3] Id. (citing SEC v. W. J. Howey Co., 328 U.S. 293 (1946).

[4] Herzliya Small Claims Court, “Dahan v. Shacharoff” (2017).

[5] Id.

[6] 2023 SKKB 116 (CanLII), https://canlii.ca/t/jxq15.

[7] Id.; Dictionary.com online: <https://www.dictionary.com/e/emoji/thumbs-up-emoji/> (17 May 2023).

[8] See 2023 SKKB 116 at 37 (CanLII), https://canlii.ca/t/jxq15 (citing The Electronic Information and Documents Act, 2000, SS 2000, c E-7.22, https://canlii.ca/t/55hcj)

DISCLAIMER: This summary is not legal advice and does not create any attorney-client relationship. This summary does not provide a definitive legal opinion for any factual situation. Before the firm can provide legal advice or opinion to any person or entity, the specific facts at issue must be reviewed by the firm. Before an attorney-client relationship is formed, the firm must have a signed engagement letter with a client setting forth the Firm’s scope and terms of representation. The information contained herein is based upon the law at the time of publication.

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