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Posted: March 27, 2017

Plaintiff Bound by Terms Incorporated by Reference into Purchase Order

On March 24, 2017, the Fourth Department issued a decision in Auburn Custom Millwork, Inc. v. Schmidt & Schmidt, Inc., 2017 NY Slip Op. 02180, holding that a plaintiff was bound by the terms of a general contract that were incorporated by reference into a separate purchase order, explaining:

Plaintiff nonetheless contends that the architect approval requirement of the submittal procedure contained in the specifications of the prime contract between defendant and the Town cannot be incorporated into the revised purchase order, and thus cannot be binding upon it. We reject that contention. A reference by the contracting parties to an extraneous writing for a particular purpose makes it a part of their agreement only for the purpose specified. Thus, under New York law, incorporation clauses in a construction subcontract, incorporating prime contract clauses by reference into a subcontract, bind a subcontractor only as to prime contract provisions relating to the scope, quality, character and manner of the work to be performed by the subcontractor. Contrary to plaintiff’s contention, we conclude that the architect approval provisions of the specifications related to the scope, quality, character and manner of plaintiff’s millwork inasmuch as compliance with those provisions was the method by which the parties ensured that the quality and character of the work met the requirements of the project.

(Internal quotations and citations omitted).

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