Incorporated documents: Overview, definition, and example
What are incorporated documents?
Incorporated documents refer to external documents that are included as part of a contract or agreement by reference. Rather than including the entire text of these documents within the contract itself, the parties agree that certain external documents will be considered part of the agreement. This incorporation is typically done through a reference clause that explicitly mentions the document and its relevance to the agreement.
Common examples of incorporated documents include:
- Terms and conditions referenced in a service agreement.
- Schedules, annexes, or appendices that are attached to the main contract.
- Industry standards, regulations, or guidelines referenced in a contract.
By incorporating these documents, the parties avoid the need to restate every detail in the main agreement, while still ensuring that the referenced documents are legally binding.
Why are incorporated documents important?
Incorporated documents are important because they allow contracts to remain concise while still capturing all the relevant details from external sources. They streamline the agreement by referring to established terms, regulations, or procedures that both parties have already agreed upon or are familiar with.
For businesses, incorporating documents into contracts saves time, reduces redundancy, and helps ensure that the contract is aligned with external laws, policies, or procedures that are critical for the contract's execution. For parties relying on industry standards or complex documentation, incorporation allows them to avoid lengthy contract negotiations while still addressing all necessary considerations.
Understanding incorporated documents through an example
Imagine a company entering into a contract with a supplier for the provision of goods. Instead of repeating the terms and conditions of the supplier’s standard sales agreement, the contract may incorporate these terms by referencing the supplier’s standard terms. This incorporation would ensure that the supplier’s terms are binding as part of the main contract.
In another example, a construction agreement may incorporate local building codes and safety regulations by reference. Rather than outlining every detail of these regulations in the contract, the agreement may state that the work will be performed in accordance with applicable local building codes, which are considered part of the contract.
An example of an incorporated documents clause
Here’s how an incorporated documents clause might look in a contract:
“This Agreement incorporates by reference the following documents, which shall be considered an integral part of this Agreement: (i) the Supplier’s Standard Terms and Conditions, as outlined in Exhibit A; (ii) the Industry Safety Standards, as referenced in Section 5; and (iii) the applicable Building Codes, as set forth in Schedule B.”
Conclusion
Incorporated documents are external documents that are made part of a contract by reference, ensuring that all relevant terms, conditions, and regulations are included without overcomplicating the contract. By incorporating these documents, parties can create more efficient, streamlined contracts while still addressing all necessary details. Whether using standards, guidelines, or other external documents, incorporation ensures that the terms are legally binding and enforceable, providing clarity and reducing the need for redundancy.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.