Rules give guidance in merging of extrinsic documents in contracts
Q&A with Jason McVickerpublished in The Oklahoman | May 20, 2015
While it is not uncommon for businesses to “incorporate by reference” certain extrinsic documents – including those containing additional terms and conditions — into sales agreements and other contracts, the practice has given rise to consumer confusion and lawsuits. In one such case, Walker v. Builddirect.com Technologies, Inc., Oklahoma homeowners claimed they were unaware of the additional documents referenced in a sales contract provided by a Canadian flooring manufacturer and should not be bound by additional terms not included in the original contract. Oklahoma’s highest court agreed.
“The Supreme Court … ruled that to properly incorporate documents, the contract must clearly reference the extrinsic document, give the identity and location of the extrinsic document, and show that the parties had knowledge of and assented to the corporation.”
“This is particularly important in the growing realm of e-commerce,” he said. Too often, he explained, consumers consent to numerous terms and conditions scattered across the web, often without even being aware of them.