Tenth Circuit Asks Oklahoma Supreme Court To Decide Application Of Internet Based Terms To Written Contract

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On August 15, the U.S. Court of Appeals for the Tenth Circuit asked the Oklahoma Supreme Court to decide whether a written consumer contract for the sale of goods incorporates by reference a separate document entitled “Terms of Sale” available on the seller’s website, when the contract states that it is “subject to” the seller’s “Terms of Sale” but does not specifically reference the website. Walker v. BuildDirect.com Techs., Inc., No. 12-6261, slip op. (10th Cir. Aug. 15, 2013). In this case, the plaintiffs filed a putative class action over allegedly defective home building products they ordered from the seller by telephone and subsequently agreed to purchase by written contract. The seller moved to compel arbitration, arguing that the written contract for the sale of goods incorporated by reference the Terms of Sale provided on the seller’s website, which included an arbitration clause. The district court denied the motion to compel, holding that the contract was ambiguous and that it could not determine as a matter of law that the contract incorporated the Internet-based terms. On appeal, the court noted that, although Oklahoma courts have held that a written contract can incorporate an extrinsic document by reference, the state’s highest court has not set standards for incorporation by reference that would resolve this case, nor has it addressed a case similar to this one. Finding no precedent in Oklahoma state law, and that the question can be resolved on the undisputed facts presented, the appeals court certified the question to the Oklahoma Supreme Court.

Topics:  Contract Formation, Terms and Conditions, Websites

Published In: Alternative Dispute Resolution (ADR) Updates, General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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