Quick construction contract tips: watch out for documents "incorporated by reference"

I often hear of situations where contractors entered into agreement that they failed to read. They then become shocked to learn that a certain provision was in the agreement and are devastated when the contract is enforced against them.  However, just as often, I encounter situations where the contact was read, but not understood.  Reading a contract is not good enough if you have no idea what you just read.  A common mistake occurs where the contract incorporates another document by reference and makes it part of the agreement.  This is often the case in AIA contracts.  Many AIA contracts will incorporate by reference the AIA A 201 terms and conditions.  But not everyone notices that provision, knows what it means, or takes the time to read the AIA A 201.  Big mistake!  When a document is incorporated into your contract by reference take the time to track that document down and read it.

Vincent T. Pallaci is a partner at the New York law firm of Kushnick Pallaci, PLLC where his practice focuses primarily on the area of construction law.  He can be reached at (631) 752-7100 or vtp@kushnicklaw.com