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INCORPORATION BY REFERENCE STRIKES AGAIN:

CONTRACTOR DEPRIVED OF RIGHTS UNDER SUBCONTRACTOR'S PERFORMANCE BOND BY FAILING TO PROVIDE NOTICE OF DEFAULT AS REQUIRED BY SUBCONTRACT INCORPORATED BY REFERENCE

By: Robert S. Tanner, Esq.

In a previous article, "Before Signing That Contract, Be Sure You Understand All of the Terms Incorporated by Reference," we discussed that during contract negotiations it is important to understand terms that might be incorporated by reference into your contracts. For example, it is not unusual for a subcontract to state something along the lines of, "the Subcontract Documents consist of (1) this Subcontract; (2) the Prime Contract, including general and supplementary conditions; (3) Drawings, Specifications, Addenda . . . ." Frequently, some of the referenced documents are not provided to the subcontractor but only offered as available for inspection if the subcontractor wants to review them. Often, the subcontractor also represents by signing the subcontract that it did inspect the referenced documents prior to signing the subcontract. It must be understood that the law generally enforces terms of referenced documents which are "incorporated by reference."  Read More....

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