TindellSteen167

A common practice in the construction market is to incorporate by reference other documents into the contract in between two parties. For instance, subcontracts regularly incorporate the “Contract Documents” (which phrase is typically defined) and have a statement to the impact that the subcontractor has either reviewed the Contract Documents or had an opportunity to do so. Florida law recognizes the rights of contracting parties to agree to the terms and conditions in documents that are only referred to in the contract. “It is a normally accepted rule of contract law that, where a writing expressly refers to and sufficiently describes yet another document, that other document, or so considerably of it as is referred to, is to be interpreted as element of the writing.” OBS Company, Inc. v. Pace Construction Corp., 558 So. 2d 404 (Fla. 1990). Nonetheless, at least 1 Florida appellate court “requires that there must be some expression in the incorporating document ... of an intention to be bound by the collateral document.... A mere reference to an additional document is not enough to incorporate that other document into a contract, especially where the incorporating document makes no specific reference that it is ‘subject to’ the collateral document.” Kanter v. Boutin, 624 So. 2d 779 (Fla. 4th DCA 1993). The issue of “incorporation by reference” possibly most often comes up when a party to a contract attempts to force the other party into arbitration based upon an arbitration clause contained in a document that is only incorporated by reference. Arbitration clauses incorporated by reference are usually enforced. For example, in Frank J. Rooney, Inc. v. Charles W. Ackerman of Florida, Inc., 219 So. 2d 110 (Fla. 3d DCA 1969), the appellate court ruled that the subcontractor could compel the general contractor to arbitration where the arbitration clause of the AIA general provisions had been incorporated by reference in the common contract which, in turn was incorporated by reference into the subcontract. The courts will also only enforce provisions that are incorporated by reference if . . . well, if they are incorporated by reference. In the aforementioned Frank J. Rooney, Inc. case, the subcontract stated that if a dispute arose as to the amount claimed by the subcontractor for extras, the dispute would be finally determined by the architect. The court stated, “It was not needed for the parties to agree that all disputes be decided by the exact same authority. They had a ideal proper to make a distinction amongst claims that would arise beneath the original sub-contract . . . and to supply a distinct method for claims that would arise subsequent to the execution of the sub-contract . . . .” Thus, despite the fact that the subcontractor’s claims concerning the contract balance had been properly the subject of arbitration, the claims concerning extras were for the architect to make a decision. One particular of the measures to undertaking a great job negotiating a contract is to recognize it, which includes the terms to be incorporated by reference. In some situations, what would be incorporated by reference may be beneficial and, as a result, must be accepted. In others, the outside terms may well be unreasonable and potentially damaging and, consequently, negotiating exceptions would make sense.