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WALKER v. BUILDDIRECT.COM TECHNOLOGIES INC.2015 OK 30Case Number: 112075Decided: 05/05/2015THE SUPREME COURT OF THE STATE OF OKLAHOMA
Cite as: 2015 OK 30, __ P.3d __

NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION. 
UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL. 




Eric Walker; Shannon Walker, 
Plaintiffs,v.BUILDDIRECT.COM Technologies, Inc. Defendant.
CERTIFIED QUESTION OF LAW
¶0 The United States Court of Appeals, Tenth Circuit, Honorable Harris L. 
Hartz, certified one question of Oklahoma law to this Court. A three-judge panel 
of that court seeks an answer to an unsettled question of Oklahoma law 
concerning whether a written contract for the sale of goods incorporates by 
reference a separate document that is neither affixed to nor its location 
identified in the seller's contract.
CERTIFIED QUESTION ANSWERED.
George H. Brown, Tony Gould, and Joshua C. Stockton, Brown & Gould, 
Oklahoma City, for Plaintiffs.Brion Brady Hitt, Sterling E. Pratt, C. 
William Threlkeld, Christopher Todd Ward, Fenton Fenton Smith Reneau & Moon, 
Oklahoma City, for Defendant.
COLBERT, J.
¶1 The United States Court of Appeals, Tenth Circuit, certified the following 
question of Oklahoma law under the Revised Uniform Certification of Questions of 
Law Act, Okla. Stat. tit. 20, §§ 1601-1611 (2011): 


Does a written consumer contract for the sale of goods incorporate 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?
In response, this Court holds that a contract must make clear reference to 
the extrinsic document to be incorporated, describe it in such terms that its 
identity and location may be ascertained beyond doubt, and the parties to the 
agreement had knowledge of and assented to the incorporated provisions. 
Therefore, this Court answers the certified question in the negative.
Factual and Procedural Background
¶2 Pursuant to section 1604(A)(2) of title 20, the federal court has 
submitted "[t]he facts relevant to the question, showing fully the nature of the 
controversy out of which the question arose." Those facts are repeated here, 
virtually verbatim.
¶3 In April 2008, Shannon and Eric Walker requested several samples of 
hardwood flooring from BuildDirect.com Technologies, Inc., a Canadian 
corporation, through BuildDirect's website. The next month they arranged, over 
the telephone, to purchase 113 boxes of flooring from BuildDirect for $8,559.70. 
BuildDirect emailed a two-page written Contract entitled "Quotation" to Ms. 
Walker, who signed and dated the Contract and returned it to BuildDirect via 
fax. The Contract describes the type, amount, and price of the flooring 
purchased by the Walkers. And, it includes 14 bullet points setting forth 
additional terms. The sixth bullet point states in full, "All orders are subject 
to BuildDirect's 'Terms of Sale.'"
¶4 The Walkers allege that after they installed the flooring, they discovered 
that their home was infested with nonindigenous wood-boring insects. According 
to the Walkers, the insects have severely damaged the home, and have caused the 
home to be subject to quarantine and possible destruction by the United States 
Department of Agriculture.
¶5 In July 2011, the Walkers filed suit against BuildDirect and Fuzhou 
BuildDirect Limited, LLC (a Chinese company, which apparently was never served 
with process and was later voluntarily dismissed from the action) in the United 
States District Court for the Western District of Oklahoma, invoking diversity 
jurisdiction. See 28 U.S.C. § 1332. They alleged that the flooring 
purchased from BuildDirect contained the larvae of wood-boring insects and 
BuildDirect should have exterminated the larvae during the manufacturing 
process. Claiming to represent a class of similarly situated purchasers of 
BuildDirect's products, the Walkers asserted causes of action including fraud, 
breach of contract, negligence, trespass, breach of implied warranties of 
merchantability and fitness for a particular use, deceptive trade practices, 
products liability, and nuisance. They demanded a jury trial. 
¶6 BuildDirect moved to compel arbitration. It pointed to the bullet point of 
the Contract stating that the Walkers' purchase is "subject to BuildDirect's 
'Terms of Sale.'" It claimed that "Terms of Sale" refers to a specific document 
bearing that name, which was available on BuildDirect's website. The document 
could be accessed by clicking on a hyperlink labeled "Terms of Sale" under the 
heading "Customer Service" near the bottom of each page of the website. The 
online "Terms of Sale" contained 15 numbered paragraphs, which provided, among 
other things, that the customer is responsible for shipping costs, that 
BuildDirect bears the risk of loss during shipping, and that the customer can 
return a product for any reason within 30 days of delivery for a full refund. 
One paragraph requires arbitration of disputes. It states:


12. ARBITRATION
All disputes arising out of or in connection with this Agreement shall be 
referred to and finally resolved by a single arbitrator (the "Arbitrator") 
pursuant to the [Canadian] Commercial Arbitration Act, R.S.B.C. 1996, c.55, as 
amended. The decision of the Arbitrator on all issues or matters submitted to 
the Arbitrator for resolution shall be conclusive, final and binding on all of 
the parties. The Arbitrator shall determine who shall bear the costs of 
arbitration pursuant to this section 12.
¶7 The Walkers responded that they were unaware of the online document and 
that it was not a part of the Contract because it was not adequately referenced 
in the Contract. The district court denied BuildDirect's motion, explaining that 
the Contract was ambiguous and that it could not say as a matter of law that the 
Contract incorporated the "Terms of Sale". BuildDirect then initiated an 
interlocutory appeal to the U.S. Courts of Appeals, Tenth Circuit. See 9 
U.S.C. § 16(a)(1)(B) (authorizing immediate appeal of order denying motion to 
compel arbitration). That court certified a limited question of Oklahoma law to 
this Court. 
DISCUSSION
¶8 The Federal Arbitration Act (FAA) governs the enforcement of written 
arbitration provisions in contracts involving commerce. See Thompson 
v. Bar-S Foods Co., 2007 OK 75, ¶ 18, 174 P.3d 567, 574. State law, 
however, governs contract formation and the terms contained therein. See
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 
938, 
944 (holding, courts generally-though with a qualification-should apply ordinary 
state-law principles that govern contract formation). The parties here do not 
dispute Oklahoma law is controlling and neither party contends a conflict of law 
analysis is necessary. 
¶9 In Oklahoma, as in most jurisdictions, the paramount objective of contract 
interpretation is to effectuate the intent of the parties as expressed by the 
terms of the contract. Currey v. Willard Steam Service, Inc., 
1958 OK 23, ¶ 30, 321 P.2d 680, 685. "The cardinal rule" in interpreting 
written contracts is to ascertain the parties expressed intent and give effect 
to the same, "if it can be done consistently with legal principles." 
Continental Supply Co.v. Levy, 1926 OK 449, ¶ 11, 247 P. 967, 968. "The language of a contract is to 
govern its interpretation, if the language is clear and explicit, and does not 
involve an absurdity." Okla. Stat. tit. 15, § 154. Thus, unambiguous, clear, and 
consistent contract terms will be enforced as written to carry out the expressed 
intention of the parties. Phillips v. Estate of Greenfield, 
1993 OK 110, ¶ 10, 859 P.2d 1101, 1104; Okla. Stat. tit. 15, § 153. 
¶10 The paramount question facing this Court is whether the "Terms of Sale" 
located on BuildDirect's website, was incorporated into the parties' written 
contractual agreement by reference. This case raises an issue of first 
impression. Oklahoma's jurisprudence in contract law on the doctrine of 
incorporation, commonly referred to as incorporation by reference, is sparse.1 While Oklahoma's 
recognition of the principles of incorporation are abundant, a bright-line 
standard has yet to be formulated. The limited precedent that exists, however, 
permits incorporation of an extrinsic document by reference where the 
incorporated material was clearly identified in the text, See Monkey 
Island Dev. Auth. v. Staten, 2003 OK CIV APP 64, ¶ 17, 76 P.3d 84, 88; or words of express incorporation 
were utilized. See High Sierra Energy, L.P. v. Hull, 
2010 OK CIV APP 96, ¶ 14, 241 P.3d 1139, 1144. But, standards to effectively 
incorporate by reference sufficient to resolve the underlying dispute before 
this Court are lacking. 
¶11 A contract may include a separate writing or portions thereof, if 
properly incorporated by reference. See Continental Supply Co. v. 
Levy, 1926 OK 
449, 247 P. 
967; Aetna Life Ins. Co. v. Bradford, 1914 OK 636, 145 P. 316. As Samuel W. Williston explains, 
extrinsic material is properly incorporated when the underlying contract makes 
clear reference to the separate document, the identity of the separate document 
may be ascertained beyond doubt, and the parties to the agreement had knowledge 
of and assented to the incorporation. See 11 Williston on Contracts § 
30:25 (4th ed. 1999). Incorporation however, is ineffective to "accomplish its 
intended purpose when the provisions to which reference is made do not have a 
reasonably clear and ascertainable meaning." Id. When incorporated 
material is properly referenced, "that other document, or portions to which 
reference is made, becomes constructively a part of the writing," forming a 
single instrument. Id.; See High Sierra Energy, L.P., 
2010 OK CIV APP 96, ¶ 14, 241 P.3d 1139, 1144; See also Okla. Stat. 
tit. 15, § 158. Although the contract at issue here concerns the incorporation 
of an extrinsic document warehoused in cyberspace-contract formation, 
incorporation therein, and basic principals of contract law remain fundamentally 
unchanged. See One Beacon Ins. v. Crowley Marine Serv., Inc., 648 
F.3d 258, 268 (5th Cir. 2011) (although Internet commerce has exposed courts to 
many new situations, contract principles remain unchanged).
¶12 BuildDirect contends its "Terms of Sale", housed on its website, was 
incorporated by reference into the Contract. It asserts that the quotation marks 
encapsulating the phrase "Terms of Sale" in the written contract places the 
Walkers on notice to the existence of an extraneous document to be incorporated 
into the parties' agreement. The Walkers, on the other hand, contend they 
neither had notice of nor assented to the additional terms housed on 
BuildDirect's website. Rather, the Walkers maintain that the Contract contained 
all relevant terms and failed to identify or give the location of an internet 
sales agreement. 
¶13 A chief consideration of incorporation is whether the party to be bound 
had reasonable notice of and assented to the terms to be incorporated. One 
Beacon Ins., 648 F.3d at 269. A party is deemed to have notice of 
incorporated terms where a reasonable prudent person, under the particular facts 
of the case, should have seen them. One Beacon Ins., 648 F.3d at 268; 
See generally Cooper v. Flesner, 1909 OK 137, 103 P. 1016, 1020-1027 ("notice" is knowledge of facts 
and circumstances that would alert a reasonable, prudent person to investigate). 
But, a party's failure to read duly incorporated terms will not excuse the 
obligation to be bound. See McDonald v. McKinney Nursery Co., 
1914 OK 438, 143 P. 191. Further, neither physical attachment nor 
magic words are necessary. See Monkey Island Dev. Auth., 
2003 OK CIV APP 64, ¶¶ 16-17, 
76 P.3d 84, 88 (finding 
incorporation by reference of additional provisions not affixed to the parties' 
contract where express language of incorporation was used); 11 Williston on 
Contracts § 30:25. But, incorporation will fail when this Court must employ a 
forced construction to "construe an ambiguity . . . to import a more favorable 
consideration to either party than that expressed in the contract." Porter v. 
Okla. Farm Bureau Mut. Ins. Co., 2014 OK 50, ¶ 13, 330 P.3d 511, 515. Such a standard ensures that 
Oklahoma consumers are protected from deceptive and unfair trade practices. 
¶14 Applying the foregoing principles to the facts of this case, this Court 
concludes that BuildDirect's "Terms of Sale" were not properly incorporated into 
the parties' Contract. "A contract must be so interpreted as to give effect to 
the mutual intention of the parties, as it existed at the time of contracting, 
so far as the same is ascertainable and lawful." Scungio v. Scungio, 
2012 OK 90, ¶ 18, 291 P.3d 616, 622 quoting Okla. Stat. tit. 15, § 152 
(2011). This Court ascertains the parties' mutual intentions from the four 
corners of the contract. Id. Merely placing quotation marks around the 
phrase terms of sale, without more, was insufficient to convey to the Walkers 
that BuildDirect was making reference to anything other than the multitude of 
sales terms already expressly enumerated within the four-corners of the 
Contract. The Contract, as presented, embodied all relevant contract terms and 
conditions. Certainly the phrase "Terms of Sale" fails to clearly and 
unambiguously state that the parties intended to incorporate any additional 
terms beyond the four-corners of the Contract. That oblique reference falls 
short of this Court's demanding standard. And, it buttresses this Court's 
conclusion that, the Walkers neither assented to nor had notice of the 
additional online terms.
¶15 If BuildDirect intended to make the online "Terms of Sale" part of the 
parties' agreement, BuildDirect could easily have accomplished that purpose by 
drafting the Contract employing words of express incorporation or clearly 
referencing, identifying and directing the Walkers to the document to be 
incorporated. In this Court's view, BuildDirect's reliance upon incorporation by 
reference must, as a matter of law, fail. Indeed, the Contract as presented 
gives every appearance of being a complete agreement-capturing the price, 
payment method, delivery and sales terms expressly enumerated in the Contract. 
No reasonable prudent person, under the particular facts of this case, would 
have notice to think otherwise. Therefore, BuildDirect's attempt at 
incorporation was nothing more than a vague allusion. 
CONCLUSION 
¶16 For the reasons stated herein, Oklahoma law does not recognize a vague 
attempt at incorporation by reference as demonstrated in this action. Under the 
Oklahoma law of contracts, parties may incorporate by reference separate 
writings, or portions thereof, together into one agreement where (1) the 
underlying contract makes clear reference to the extrinsic document, (2) the 
identity and location of the extrinsic document may be ascertained beyond doubt, 
and (3) the parties to the agreement had knowledge of and assented to its 
incorporation. 
CERTIFIED QUESTION ANSWERED.
ALL JUSTICES CONCUR. 
FOOTNOTES
1 The "Doctrine of 
Incorporation," as recognized in Oklahoma, is a doctrine commonly recognized in 
the context of Probate law. See generally Miller v. First Nat. 
Bank & Trust Co., 1981 OK 133, 637 P.2d 75 (where the court acknowledged "[t]he 
doctrine of incorporation by reference is recognized in Oklahoma, and by a 
majority of other jurisdictions"). See also In re Estate of 
Richardson, 2002 OK CIV APP 
69, 50 P.3d 
584; Matter of Estate of Sneed, 1998 OK 8, 953 P.2d 1111; and In re Fullerton's Estate, 
1962 OK 168, 375 P.2d 933. Those cases and their progeny are 
instructive in probate. 

Citationizer© Summary of Documents Citing This Document


Cite
Name
Level


None Found.


Citationizer: Table of Authority


Cite
Name
Level


Oklahoma Court of Civil Appeals Cases
 CiteNameLevel
 2002 OK CIV APP 69, 50 P.3d 584, IN THE MATTER OF THE ESTATE OF RICHARDSONDiscussed
 2003 OK CIV APP 64, 76 P.3d 84, MONKEY ISLAND DEVELOPMENT AUTHORITY v. STATENDiscussed at Length
 2010 OK CIV APP 96, 241 P.3d 1139, HIGH SIERRA ENERGY, L.P. v. HULLDiscussed at Length
Oklahoma Supreme Court Cases
 CiteNameLevel
 1998 OK 8, 953 P.2d 1111, 69 OBJ        482, IN THE MATTER OF THE ESTATE OF SNEEDDiscussed
 1914 OK 438, 143 P. 191, 44 Okla. 62, McDONALD v. McKINNEY NURSERY CO.Discussed
 1993 OK 110, 859 P.2d 1101, 64 OBJ        2858, Phillips v. Estate of GreenfieldDiscussed
 1914 OK 636, 145 P. 316, 45 Okla. 70, AETNA LIFE INS. CO. v. BRADFORDDiscussed
 1958 OK 23, 321 P.2d 680, CURREY v. WILLARD STEAM SERVICEDiscussed
 1962 OK 168, 375 P.2d 933, IN RE FULLERTON'S ESTATEDiscussed
 1909 OK 137, 103 P. 1016, 24 Okla. 47, COOPER v. FLESNERDiscussed
 2007 OK 75, 175 P.3d 567, THOMPSON v. BAR-S FOODS COMPANYCited
 2012 OK 90, 291 P.3d 616, SCUNGIO v. SCUNGIODiscussed
 2014 OK 50, 330 P.3d 511, PORTER v. OKLAHOMA FARM BUREAU MUTUAL INSUR. CO.Discussed
 1981 OK 133, 637 P.2d 75, Miller v. First Nat. Bank & Trust Co.Discussed
 1926 OK 449, 247 P. 967, 121 Okla. 132, CONTINENTAL SUPPLY CO. v. LEVYDiscussed at Length













