Pub. 5 2014 Issue 4

winter 2014 17 West Virginia Banker Addendum never became a part of their rental contracts because it was not pro- vided to them until after they signed the one-page rental contracts, even though the rental contracts expressly referred to the applicability of the Addendum. The trial court judge accepted the plaintiffs’ argu- ments and refused to compel arbitration. The Supreme Court of Ap- peals Defines Incorporation by Reference Principles In the West Virginia Supreme Court of Appeals, U-Haul argued that the trial court judge erred because the rental con- tracts unmistakably alerted the plaintiffs that their contracts included the Adden- dum. In making this argument, U-Haul relied upon a traditional principle of con- tract law known as incorporation by refer- ence. Under traditional legal principles, a contract can include contractual terms and conditions set forth in separate agreements by expressly referring to the applicability of the separate agreements. Although the Court acknowledged the incorporation by reference doctrine, it refused to find that the doctrine’s require- ments had been satisfied with respect to the Addendum. For the first time, the Court expressly defined what is necessary to take advantage of the incorporation by reference doctrine. According to the Court, “In the law of contracts, parties may incorporate by reference separate writings together into one agreement. However, a general reference in one writing to another docu- ment is not sufficient to incorporate that other document into a final agreement. The Court explained that the document incorporating a separate document must “describe the other document in such terms that its identity may be ascertained beyond doubt” and that there must be certainty as to the parties’ agreement to the terms of the incorporated document. Applying these newly announced princi- ples, the Court upheld the lower court’s decision. Although the Court acknowl- edged that both U-Haul’s pre-printed Rental Contracts and electronic contracts succinctly referenced the Addendum, the Court found, U-Haul’s reference to the Addendum insufficient for three reasons: • The reference to the Addendum was too general with no detail provided to ensure that U-Haul’s customers were aware of the Ad- dendum and its terms, including its inclusion of an arbitration agree- ment.” • The lack of a detailed description was compounded by the Court’s belief that the Addendum looked more like a document folder adver- tising U-Haul products, services, and drop-off procedures, than a legally binding contractual agree- ment. • U-Haul provided customers a copy of the Addendum only after the Rental Contract had been executed. Impact of U-Haul on Financial Institutions The legal principles discussed and applied in U-Haul apply to all contracts entered into in West Virginia, including contracts between banks and their customers. For example, U-Haul’s rental contract and rental contract addendum are very similar to banks’ traditional use of “signature cards” in the opening of demand deposit checking accounts. Typically, the sig- nature card incorporates by reference a bank’s checking account agreement, but Ryan Environmental has been serving West Virginia banks for more than 20 years, helping them mitigate risk and protect their real estate portfolios. We specialize in • Phase 1 and Phase 2 environmental assessments • Remediation and clean-up of tainted properties • Certified asbestos inspections and abatement • Certified underground and above ground storage tank removal and installation Call Al Anderson or Hunter Reed at 304-842-5578 for a sample report and/or pricing schedule. For a complete list of our services, visit www.ryanenv.com.  Supreme Court — continued on page 19