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INTRODUCTORY LANGUAGE CAN'T CONTRADICT BODY-OF-THE-CONTRACT PROVISIONS

Wednesday, January 02, 2013 04:25 am

 

Incorporation by Reference

J.E. Dunn Construction Co. v. S.R.P. Development Ltd Partnership, et al., 2012 U.S. Dist. Lexis 134808 (D. Md. Sept. 20, 2012)

Adequate incorporation-by-reference language will ideally denote specific documents and be contained in the body of the contract, not in the preamble.

General contractor S.R.P. Development Limited Partnership (SRP) hired subcontractor J.E. Dunn Construction (Dunn) to perform on a church construction project in Upper Marlboro, Maryland. The project owner subsequently terminated its prime contract with SRP due to negligent misrepresentations that SRP made to it regarding the project's scope and cost. SRP in turn terminated its subcontract with Dunn without cause. The SRP-Dunn subcontract entitled Dunn to recover the cost of work completed up to the termination date plus costs associated with cancelling existing subcontracts, purchase orders, etc. SRP failed to pay, and Dunn filed suit against SRP and its partners (the defendants), alleging contract breach, negligence, and negligent misrepresentation. The defendants moved to dismiss, claiming that the subcontract required mediation as a condition precedent to litigation. A Maryland district court denied that motion.

The defendants claimed that the subcontract--based on AIA Document A491-1996--incorporated by reference AIA Document A201-1997, General Conditions of the Contract for Construction, which contains two dispute resolution provisions. One st[...]

 
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