Do Internet Terms of Service (ToS) Apply to Paper Contracts?


Homeowners filed a breach of contract claim for defective flooring based on a paper contract, but the seller claims that the paper contract incorporated its website ToS including mandatory arbitration of disputes. Shannon & Eric Walker sued BuildDirect in Oklahoma federal court and alleged:

...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, cannot be completely eradicated without destroying the home, and have caused the home to be subject to quarantine and possible destruction by the United States Department of Agriculture.

The Walkers signed and faxed the 2 page agreement to BuildDirect in May 2008 which included a provision that merely said:

All orders are subject to BuildDirect’s ‘Terms of Sale.’

The 10th Circuit Court of Appeals asked the Oklahoma Supreme Court to determine the following:

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?

It is hard to image that Internet ToS can apply with such a vague reference, but stay tuned to see what the Oklahoma Supreme Court does with this question.

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