References: Overview, definition and example
What are references?
References in a contractual context typically refer to specific citations or mentions of other documents, agreements, clauses, or laws within the contract itself. These can include references to prior agreements, related contracts, governing laws, or specific clauses that provide additional context or set the framework for the terms outlined in the agreement. References ensure that parties understand the relationships between various provisions, documents, or external factors that impact the contract.
References can also serve to direct parties to external sources for more detailed information or clarification on particular subjects, ensuring that the contract remains concise while linking to other relevant materials.
Why are references important?
References are important because they help clarify the context and provide necessary details without overcomplicating the contract itself. They allow a contract to remain concise while ensuring that the parties understand the full scope of their obligations and rights, which may be influenced by other documents or agreements. References to laws, regulations, or previous agreements can also help establish legal frameworks, helping to prevent ambiguity and reducing the likelihood of disputes.
In contracts, references are also used to tie together clauses that may have broader implications or dependencies, creating a more organized and cohesive agreement.
Understanding references through an example
A company enters into a supply agreement with a vendor. The contract references specific delivery terms outlined in a prior agreement between the two parties, as well as the governing law that will apply to the contract (e.g., a state’s commercial code). By referring to these documents, the contract clarifies the exact delivery procedures and legal jurisdiction without needing to restate them in full.
An example of a references clause
Here’s how a references clause might appear in a contract:
“This Agreement incorporates by reference the terms and conditions outlined in the Service Level Agreement (SLA) dated [Insert Date] and the Confidentiality Agreement dated [Insert Date]. In the event of any conflict between the terms of this Agreement and the referenced documents, the terms of this Agreement shall prevail. The Parties also acknowledge that this Agreement is governed by the laws of [Insert Jurisdiction] as per Section 5 of the Terms and Conditions.”
Conclusion
References in contracts are essential tools for providing clarity and context while avoiding redundancy. By referencing other documents, clauses, or laws, a contract can remain efficient and focused, while still incorporating necessary details that help govern the relationship between the parties. Properly referencing related materials ensures that all relevant information is accessible and understood, reducing the potential for confusion or disputes.
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.