RTS Shearing v. BNI Coal, 965 N.W.2d 40

Background

RTS Shearing performed rock‑crushing services for BNI under March and July 2015 one‑page purchase orders that stated in bold: “BNI Coal, LTD’s Standard Terms & Conditions apply; for a copy contact BNI.”
A separate document titled "TERMS AND CONDITIONS OF CONTRACT" (contained in the record) included a unilateral cancellation clause allowing BNI to cancel or suspend the contract and limiting BNI’s liability for costs.
RTS performed work, invoiced $432,800 under the two purchase orders, and accepted payment from BNI, but did not complete the full quantities called for; rock remained uncrushed.
In January 2016 BNI notified RTS it was cancelling the balance of the purchase orders under the Terms and Conditions; RTS sued for breach of contract in February 2019.
BNI moved for summary judgment arguing the Terms and Conditions had been incorporated by reference and authorized the cancellation; the district court granted summary judgment for BNI, and the North Dakota Supreme Court affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether BNI’s separate Terms and Conditions were incorporated by reference into the March and July 2015 purchase orders	RTS: Not incorporated—reference was ambiguous, the referenced document differed in style/name, not discussed, and not provided; no mutual assent	BNI: Incorporated—purchase orders expressly referenced Standard Terms & Conditions in bold; RTS assented by performing and accepting payment	Incorporated as a matter of law; purchase orders clearly and unambiguously incorporated the Terms and Conditions and identity was ascertainable
Whether BNI’s unilateral cancellation breached the contract	RTS: Cancellation breached the purchase orders; Terms were not part of the contract	BNI: Cancellation permitted by the incorporated Terms and Conditions	Cancellation permitted under the incorporated Terms; no breach as a matter of law
Whether genuine issues of material fact exist about assent to the incorporated terms (precluding summary judgment)	RTS: Disputes over knowledge, assent, and course of dealing create factual issues	BNI: Facts are undisputed—RTS received purchase orders, did not request terms, performed, invoiced, and was paid	No genuine issue; reasonable minds can reach only one conclusion of assent from the undisputed facts; summary judgment appropriate
Whether RTS can avoid enforcement of the Terms after accepting benefits/payments	RTS: Terms materially alter remedies/obligations and RTS objected after learning; equitable relief asserted	BNI: RTS voluntarily accepted benefits/payments and is bound by obligations known or that ought to be known	RTS accepted benefits and payment; cannot avoid incorporated obligations; equitable relief fails

Key Cases Cited

26th Street Hospitality, LLP v. Real Builders, Inc., 2016 ND 95, 879 N.W.2d 437 (contract interpretation is a question of law for the court)
Limberg v. Sanford Med. Ctr. Fargo, 2016 ND 140, 881 N.W.2d 658 (upholding incorporation by reference in some commercial contexts)
Standard Bent Glass Corp. v. Glassrobots Oy, 333 F.3d 440 (3d Cir. 2003) (incorporation proper where contract references a separate document, identity ascertainable, and incorporation won’t surprise parties)
Halbach v. Great‑West Life & Annuity Ins. Co., 561 F.3d 872 (8th Cir. 2009) (terms incorporated only if known or easily available to parties)
Dakota Foundry, Inc. v. Tromley Indus. Holdings, Inc., 737 F.3d 492 (8th Cir. 2013) (denying incorporation where the referenced standard terms were not readily available and no meeting of minds on arbitration clause)
Alerus Fin., N.A. v. Marcil Group, Inc., 2011 ND 205, 806 N.W.2d 160 (a party cannot avoid contractual language by failing to read it)
Golden v. SM Energy Co., 2013 ND 17, 826 N.W.2d 610 (voluntary acceptance of benefits may imply consent; typically fact question)
Molbert v. Kornkven, 2018 ND 120, 910 N.W.2d 888 (when reasonable persons can reach only one conclusion from facts, a fact question may become a question of law)