Hardwood Floors April/May 2025

By Barbara F. Dunn

2 DOCUMENTS INCORPORATED BY REFERENCE

While this language may seem innocuous, its effect is anything but innocuous. The provision, though softly worded, has a significant impact: the losing party pays the winning party’s attorney’s fees and costs in addition to paying its own attorney’s fees and costs. This provision often rears its head in settlement negotiations with the other side saying that they will be the winner and therefore if a settlement is not reached, the other side will be paying double the amount of attorneys.

The contract is the contract and there’s nothing else you can be bound to – correct? That statement may in fact be false if there are provisions in a contract that incorporate other documents merely by referring to such

documents by reference. Often, the language will be included as follows: “The terms of this Contract, together with the policies and procedures of the Facility, shall constitute the parties’ entire agreement.” Again, while this provision may appear innocuous on the surface, its impact can be costly. When I see this type of provision, I frequently will ask my client whether they have received a copy of the Facility’s policies and procedures. If they have not, I recommend they do so and ensure that they agree with all terms included in the document because simply by referring to the policies and procedures as indicated above, the client will be bound to its terms. If the client agrees with the terms, then the language can remain in the contract; however, they will want to modify the provision to state “the policies and procedures of the Facility as attached” so as to ensure they will not be bound to modifications to the provision.

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