WALKER v. BUILDDIRECT.COM TECHNOLOGIES INC.
349 P.3d 549
Okla.2015Background
- In May 2008 the Walkers purchased hardwood flooring from BuildDirect; they signed a two‑page written "Quotation" that described the goods and included 14 bullet‑point terms. Bullet 6 stated: "All orders are subject to BuildDirect's 'Terms of Sale.'"
- BuildDirect maintained a separate, 15‑paragraph "Terms of Sale" posted on its website (accessible via a hyperlink on the site) that included an arbitration clause. The Contract did not identify or provide the website location for that document.
- After installation the Walkers discovered wood‑boring insect infestation and sued BuildDirect in federal court asserting multiple tort and contract claims and seeking class certification.
- BuildDirect moved to compel arbitration, relying on the Contract's reference to its online "Terms of Sale." The district court denied the motion, finding that incorporation of the online terms was not clear as a matter of law.
- The Tenth Circuit certified the narrow question to the Oklahoma Supreme Court: whether the Contract's statement that orders are "subject to BuildDirect's 'Terms of Sale'" (without identifying or attaching the online document) incorporated the website Terms of Sale into the written contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a written sales contract incorporated by reference the seller's separate online "Terms of Sale" when the contract states orders are "subject to" those Terms but does not identify or locate them | Walker: she had no notice or assent to the online Terms; the written Contract on its face contained all terms | BuildDirect: the quoted phrase signaled incorporation of the separate "Terms of Sale" on its website, including the arbitration clause | Held: No. Incorporation failed. A valid incorporation requires clear reference, ascertainable identity/location of the extrinsic document, and notice/assent by the parties; the mere quoted phrase was too vague to incorporate the online Terms. |
Key Cases Cited
- Thompson v. Bar‑S Foods Co., 174 P.3d 567 (Okla. 2007) (FAA governs enforcement of written arbitration provisions; state law governs contract formation)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (ordinary state‑law principles govern contract formation and arbitration clause enforceability)
- Currey v. Willard Steam Service, Inc., 321 P.2d 680 (Okla. 1958) (primary goal of contract interpretation is to effectuate parties’ expressed intent)
- Continental Supply Co. v. Levy, 247 P. 967 (Okla. 1926) (extrinsic writings may be incorporated by reference when properly identified)
- Phillips v. Estate of Greenfield, 859 P.2d 1101 (Okla. 1993) (enforce unambiguous contract terms as written)
- McDonald v. McKinney Nursery Co., 143 P. 191 (Okla. 1914) (failure to read incorporated terms does not excuse obligation when incorporation is proper)
- Monkey Island Dev. Auth. v. Staten, 76 P.3d 84 (Okla. Civ. App. 2003) (incorporation by reference sustained where express language identified extrinsic provisions)
- High Sierra Energy, L.P. v. Hull, 241 P.3d 1139 (Okla. Civ. App. 2010) (recognizes use of express incorporation language to include external terms)
- One Beacon Ins. v. Crowley Marine Serv., Inc., 648 F.3d 258 (5th Cir. 2011) (internet‑hosted terms do not change fundamentals of incorporation; notice and assent are key)
- Porter v. Okla. Farm Bureau Mut. Ins. Co., 330 P.3d 511 (Okla. 2014) (court will not force a construction that imports terms beyond those expressed in the contract)
- Scungio v. Scungio, 291 P.3d 616 (Okla. 2012) (ascertain mutual intent from the four corners of the contract)