If you haven’t heard the news, a recent article published by CNN Business reported that the Director of the United Nations’ World Food Programme (“WFP”), David Beasley, declared that “2% of Elon Musk’s wealth could help solve world hunger.” According to Mr. Beasley, billionaires need to “step up now, on a one-time basis.” Well, Elon Musk, who has a net worth of nearly $289 billion, responded to this call for action and tweeted “If WFP can describe on this Twitter thread exactly how $6B will solve world hunger, I will sell Tesla stock right now and do it.”
After reading these series of tweets, we couldn’t help but wonder: Was Elon Musk’s tweet an offer inviting acceptance by performance? Or was it an invitation to bargain? What are the legal ramifications of this Twitter thread?
In Virginia, the short answer is this: It is likely Elon Musk’s tweet constitutes an offer which, if accepted by the WFP, would create a legally enforceable contract. Below is a more in-depth analysis and a reminder to be careful of how you tweet if you want to avoid creating a contract via Twitter.
In Virginia, Elon Musk’s tweet would likely constitute an offer because it “is clear, definite, and explicit, and leaves nothing open for negotiation.” Chang v. First Colonia Sav. Bank, 242 Va. 388, 391 (1991) (internal quotation omitted). Elon’s offer contains essential terms, including who (the World Food Programme), what (describe how $6 billion will solve world hunger), where (on this Twitter thread), and how much ($6 billion).
Assuming WFP properly accepts Elon’s offer, can Elon then withdraw his offer? Nope, sorry Elon, but you’re likely stuck with your obligation to pay WFP the promised $6 billion. Truthfully, “an offer that is not supported by consideration may be withdrawn any time before it is accepted.” Chang, 242 Va. at 392 (emphasis added). However, Elon is required to communicate the withdrawal of the offer to WFP before it accepts. Id. If Elon is having second thoughts about whether he wants to fulfill this promise, then he should make sure to communicate to the WFP (through Twitter or otherwise) that he is revoking his offer before WFP accepts.
Similarly, if WFP accepts the terms of Elon’s offer by performance and demands Elon pay the $6 billion, can Elon then argue that there is no enforceable contract because there was no “meeting of the minds?” Again, the answer is likely “no” in Virginia. The Virginia Supreme Court said it best in Gibney & Co. v. Arlington B. Co.:
The offeror has a right to prescribe in his offer any conditions as to time, place, quantity, mode of acceptance, or other matters, which it may please him to insert in and make a part thereof, and the acceptance to conclude the agreement must in every respect meet and correspond with the offer, neither falling within or going beyond the terms proposed, but exactly meeting them at all points and closing with these just as they stand.
Gibney & Co. v. Arlington B. Co., 112 Va. 117, 120-21 (1911). Accordingly, if the WFP describes how $6 billion will solve world hunger on the Twitter thread created by Elon Musk, then the agreement is likely enforceable because such acceptance satisfies the conditions of Elon’s offer.
Put another way, the terms of Elon’s offer create the power to accept by performance. Therefore, WFP can only enforce the agreement if it accepts by performing the terms of the offer. Conversely, if the WFP were to respond to Elon with “I accept,” then such acceptance would not create a binding agreement entitling WFP to $6 billion because such acceptance would not “in every respect meet and correspond with the offer.” Gibney & Co., 112 Va. at 121.
Elon’s best defense in avoiding the creation of a contract is to argue that he did not intend for the tweet to constitute an offer. As the Virginia Supreme Court has clarified, however:
“[t]he mental assent of the parties is not requisite for the formation of a contract. If the words or other acts of one of the parties have but one reasonable meaning, his undisclosed intention is immaterial… The law, therefore, judges of an agreement between two persons exclusively from those expressions of their intentions which are communicated between them. An agreement or mutual assent is of course essential to a valid contract but the law imputes to a person an intention corresponding to the reasonable meaning of his words and acts. If his words and acts, judged by a reasonable standard, manifest an intention to agree, it is immaterial what may be the real but unexpressed state of his mind.”
Lucy v. Zehmer, 196 Va. 493, 503 (1954).
In other words, in determining whether Elon’s tweet constituted an offer, Virginia courts would examine whether the tweet manifested an intent to agree, which is judged by a reasonable standard. The “reasonable standard” is an objective inquiry, but the point still stands: a Twitter user should be wary of forming agreements via Twitter.
This line of inquiry begs the next question, does a series of Tweets really create an enforceable contract? The answer is likely “yes” under Virginia’s Uniform Electronic Transactions Act.
Uniform Electronic Transactions Act (“UETA”):
The Uniform Electronic Transactions Act (“UETA”) was enacted to enable electronic commerce by recognizing the validity of contracts, records, and signatures in an electronic format. UETA was drafted and approved for enactment by the National Conference of Commissioners on Uniform State Laws in 1999. Most states, including Virginia, have enacted a version of the UETA. Virginia’s version of the UETA is set forth in Virginia Code section § 59.1-479, et. seq. In part, the Virginia UETA provides that the act shall be construed and applied to “[f]acilitate electronic transactions consistent with other applicable law,” among other things. Va. Code § 59.1-484.
An “[e]lectronic signature” under Virginia’s UETA “means an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” Va. Code § 59.1-480(8) (emphasis added).
The electronic signature must be attributable to the party, the effect of which “is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption…” Va. Code § 59.1-487(b). As the Virginia Code further provides, “[a]n electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.” Va. Code § 59.1-487(a).
An argument can be made that Elon’s “electronic signature” is his Twitter handle (@elonmusk) or even the account name that appears in bold (“Elon Musk”). Importantly, the Tweet is likely attributable to Elon because the blue checkmark next to his name signifies that the account is verified as Elon Musk’s personal account. More specifically, “[t]he blue Verified badge on Twitter lets people know that an account of public interest is authentic. To receive the blue badge, your account must be authentic, notable, and active.” See Twitter’s About Verified Accounts. Accordingly, it is likely Elon’s Tweet, which constitutes the offer, and WFP’s responsive Tweet, which has yet to occur but would constitute the acceptance, would create an enforceable agreement under the UETA.
Although time will tell whether the WFP will accept the terms of Elon Musk’s offer by performance, it is important to know that a simple Twitter exchange can potentially result in a legally enforceable agreement. If you have a question about contract formation or enforceability, Vandeventer Black LLP’s attorneys are available to advise and assist.