Emojis, text messages and construction contracts

PHOTO: © DZHOT / ADOBE STOCK

When the Saskatchewan Court of King’s Bench determined that the use of a “thumbs-up” text message constituted acceptance of a contract to sell 87 metric tonnes of flax, which the defendant later breached by failing to deliver the product as agreed, it set a precedent that may impact more than the agricultural sector.

Irrespective of the subject matter of the agreement, and depending on the circumstances, the reasoning in South West Terminal Ltd. v Achter Land & Cattle Ltd. could apply to communications that parties view as casual or unimportant.

The use of text messages, teams chats, and direct messages on third-party platforms like Instagram and WhatsApp, are common methods of communicating with colleagues and contracting parties alike throughout the lifecycle of a construction project. While South West may seem like a novel decision, at its core it is really just a case about the treatment of casual communication between counterparties.

Casual communications like text messages are not only relevant and material documents (and, therefore, subject to disclosure in litigation) but Canadian courts have been considering casual forms of communication to make critical decisions in construction cases for years.

For example, in 1475182 Ontario Inc. o/a Edges Contracting v Ghotbi et al, the Ontario Superior Court of Justice held that a text message met the requirements of section 13(10) of the Limitations Act, which required an acknowledgement of indebtedness to be in writing and signed by the debtor or their agent. This decision used similar logic to South West, stating that a person’s unique phone number, linked with their phone, along with other unique identifiers associated with a person’s cell phone, constitute a digital signature on every message sent.

In Young Boy Drywall v Housemaster Construction and Management Co, the court considered text messages between the contracting parties regarding deadlines to complete work in order to determine whether the parties had revised the project deadline.

In fact, courts have looked through the informalities and abbreviations associated with text message communications to determine contract terms or to deny the existence of an agreement altogether. For instance, in England v Saunders-Todd, the parties contracted for a home renovation and communicated primarily through text messaging. A dispute arose regarding the terms of payment. The court noted that, “Just as conversation can lead to the creation of an oral contract, text messages can be used to create contracts and establishing terms.”

In Hodder Construction (1993) Ltd v Topolnisky, the Supreme Court of British Columbia found that there was no enforceable contract between the two parties after considering text message communications, “fixed price” documents, construction plans and designs, and the oral testimony of the parties about their discussions over the course of construction. The court concluded that there was no contract as there was not a meeting of the minds on key elements including contract price or remuneration.

KEY TAKEAWAYS

Case law makes it clear that casual communications like text messages or direct messages will not only be reviewed by a court in a dispute, but could serve as key interpretive aids for a court tasked with understanding and adjudicating a dispute. Fortunately, there are practical steps construction-sector participants can take to mitigate risk.

Educate project personnel that casual communications, like texts, could be disclosed. Preventing the indiscriminate flow of information that may be unclear or inconsistent with project or pre-dispute objectives can only be achieved by providing project team members with training and education on the potential impact of casual communications.

Likewise, a properly drafted, clear and concise written contract will prevent the need for a court to look to other communications to determine the existence or terms of the contract.

Taking proactive steps to draft project reporting and communication provisions into agreements can act as an effective safeguard. Moreover, parties to a construction contract should create communication procedures highlighting how project personnel should engage with each other and how to escalate issues to those with decision-making authority.

Limiting the authority to approve contractual changes or make representations to a counterparty is an effective means of reducing the risk that a litigant will take advantage of casual communications between the parties during the course of the project.

Trish Morrison, partner and national business leader, and Marin Leci, senior associate, are construction lawyers at Borden Ladner Gervais LLP. This article provides an overview and is not intended to be exhaustive of the subject matter contained therein. Although care has been taken to ensure accuracy, this article should not be relied upon as legal advice.